Alcohol and drugs

Alcohol 

Excise Duty Based on Alcohol Content:

• The Bill proposes levying excise duty on alcoholic beverages based on their alcohol content. This approach is intended to reduce the consumption of illicit alcohol and encourage the production of beverages with lower alcohol content​​​​.

• Specific rates proposed include:

1. KSh. 35 per centiliter of pure alcohol for beverages with at least 4% alcohol content​​.

2. KSh. 25 per centiliter of pure alcohol for beverages with up to 20% alcohol content

3. KSh. 16 per centiliter for beverages with over 20% alcohol content​​.

Committee's take 

• The Departmental Committee on Finance and National Planning supports these measures as they align with international best practices, which base excise duty on the strength of the alcohol in the product​​​​.

• The Committee has recommended reducing the proposed rate from KSh. 16 to KSh. 10 per centiliter of pure alcohol to minimize market distortion and the potential increase in illicit alcohol consumption​​​​. 

Tobacco and Nicotine Products

Cigarettes and Nicotine Products:

• The Bill proposes uniform excise duty rates for cigarettes, both with and without filters, at KSh. 4,100 per milliliter​.

• For products containing nicotine or nicotine substitutes intended for inhalation without combustion, the proposed rate is KSh. 2,000 per kg. Liquid nicotine for electronic cigarettes is proposed to be taxed at KSh. 100 per milliliter​.

committee's take 

• Increasing excise duty on nicotine products would reduce their affordability and thus their consumption​.

Eco Levy on Electronic Cigarettes:

• An eco levy is proposed for electronic cigarettes and other nicotine delivery devices, as these products contain microplastics and pose significant environmental and health challenges​​​​.

• This levy aims to address environmental damage and pollution caused by the import of certain finished products into Kenya​​​​.