Boon for brewer as 'sin' tax is slashed

East African Breweries Ltd (EABL) has received a major boost for its new Kisumu plant after the government exempted excise tax on alcohol made from sorghum, millet and cassava by 95 per cent.

This as EABL prepares to commission the Sh15 billion plant that will use selected white sorghum varieties to brew a million tonnes of its low-end beer – Senator Keg.

Initially, beer made from the agricultural produce was exempted from excise tax by 90 per cent.

This means that the retail prices for Keg brew, which targets low-income consumers, will go down.

The Excise Duty (Remission of Excise Duty) (Amendment) Regulations, 2019, allows the manufacturers of beer made using these cereals to make an application to the Cabinet Secretary for National Treasury to grant remission of excise duty at 95 cent.

The new taxation regulations, said Cabinet Secretary Ukur Yatani, came into effect in July last year. This means that EABL will go for refunds for any of the additional excise taxes it paid on its Senator beer from then to December 18 when the regulations were published. This, however, is on condition that “the manufacturer shall invest at least Sh5 billion in the manufacture of the beer.”