Business Desk 
Treasury Cabinet Secretary Ukur Yatani has proposed to raise the consumption tax on beer by Sh12.15 per litre to Sh134, wine by Sh20.80 to Sh229, while spirits like whisky, gin, rum, and vodka will attract Sh47.60 additional tax to Sh335.30 per litre.[Photo/KBL Website]
East African Breweries Plc (EABL) has asked the government to reconsider its approach to the taxation of the alcohol beverage sector to avoid the harmful effects of the perpetual increases in tax.
EABL Group Chief Executive Officer and Managing Director Jane Karuku said the proposal in the current Finance Bill to increase excise duty is disastrous to the industry.
Speaking at a Media Day held at the company’s headquarters on Tuesday, Karuku said the resulting increase in the price of the company’s products would affect not only sales but the government’s own revenue targets.
“The finance bill has yet to go through a few more hoops because it has to be discussed in Parliament but from what I heard the minister say, it’s very bad for our industry. The tax increase of 10 per cent on an already tough excise regime is really going to hurt our business,” said Karuku.
She said while the alcohol beverage industry appreciates that it must pay tax, there is a need for the government to reconsider the approach it has taken to the sector.
“What we plead with the government is to relook at the levels. The level of taxation is getting to the point of the law of diminishing returns where the revenue for the government is going to be declining instead of going up because our business is going to be depressed because the price of beer must go up if the Bill is passed,” said Karuku.
Treasury Cabinet Secretary Ukur Yatani has proposed to raise the consumption tax on beer by Sh12.15 per litre to Sh134, wine by Sh20.80 to Sh229, while spirits like whisky, gin, rum, and vodka will attract Sh47.60 additional tax to Sh335.30 per litre.
The finance bill is currently under the purview of the National Assembly’s Finance and Planning Committee, which has asked for the views of the public as it looks to make recommendations to the rest of the House.
The alcoholic beverages industry is also likely to be affected by a proposed increase in the excise duty on locally manufactured glass, which would make the containers they use for packaging more expensive.
