A report released by the Kenya National Bureau of Statistics on the 30th of June, revealed that inflation had risen from 7.1% in May to 7.9% in June. This is the highest it has gone in five years. This 2022 1st Quarter Gross Domestic Product (GDP) and Balance of Payments (BoP) reports, left many rumbling about the soaring cost of living in the country. However, Kenyans are yet to see the end of their financial woes. This can be attributed to the Finance Bill 2022 which was assented into law by the President the other week. This Act has raised excise duty on a number of goods and services that the government categorizes as harmful, opulent or ethically suspect by almost or more than 10 percent. The move to increase these tax statutes comes in a bid to generate an additional revenue of Ksh50.4 billion. The government took this as a measure to cater for the Ksh3.3 Trillion National Budget for this Financial Year.
It’s funny how Kenyans have always complained about the state of the economy from Monday to Thursday but the weekend is where they draw the line. Well, that is about to change as the cost of ‘enjoyment’ just went up. Kenyans will have to dig deeper into their already almost empty pockets, to enjoy a bottle of whiskey, gin, or rum. These spirits have been charged a duty increase of more than 20%; to Sh335.30 per litre from Sh278.70 previously. Beer also faces higher taxation by a whopping 9.97 percent; from Sh121.85 to Sh134 per litre. Wines have also not been spared. Alcoholic drinks derived from the fermentation of fruits and wines will be levied with a tax of Sh229 per litre from Sh208.20 earlier. An increase of 9.99 percent.
Parliament declined counsel by the Finance and Planning Committee to spare alcohol from increased taxes for the fiscal year 2022/2023. The committee chaired by Homabay Women Rep, Gladys Wanga, cited that this would increase the intake of illicit drinks as most households are already scuffling with the high cost of living.
Cigarette fanatics are also set to feel the pinch of increased taxes. Cigarettes with filters are set to be levied a duty of 3,825.99 shillings per mille up from 3,447.61 shillings per mille. Cigarettes without filters will be charged 2,752.97 shillings per mille up from 2,502.74 shillings per mille.
Other products that will attract increased duty according to the Finance Bill 2022 include;
- Fruit and vegetable juices will attract a tax increase of 9.29 percent.
- Imported chocolate tax has been increased from Sh220.31 per kg to Sh242.29 shillings per kg.
- Imported jewelry including rings, necklaces, bracelets, and earrings will go up by 5% to a duty of 15% from 10% earlier on.
Kenyans need to buckle up and prepare for tougher economic times ahead. It’s probably the time to ask for an appraisal, take on an extra job, or work twice as hard. The dice has been cast and the odds are not in your favor, fellow Kenyans.