Brewers oppose new tax changes

Alcoholic Beverages Association of Kenya (ABAK) Secretary Eric Kiniti with Chairman Eric Githua (left). [David Gichuru, Standard]

Kenya's alcoholic beverage industry has raised concerns over proposed tax adjustments in the Finance Bill 2024.

The Alcoholic Beverages Association of Kenya (Abak) on Tuesday said the changes could have adverse effects of a double tax on imported alcohol products and urged the government to reconsider its stance, proposing a more balanced approach to taxation.

"Excess taxes should be levied only at the point of finished product, easing the burden on importers," said Abak Chairman Eric Githua at a press briefing in Nairobi. "We believe this approach will not only support industry sustainability but also foster revenue generation."

Abak highlighted research findings indicating a potential decrease in beer taxes, which could benefit consumers. However, the focus remained on spirits, with the association urging the government to lower beer taxes to eight per cent to stimulate revenue growth. Abak warned against the negative implications of the proposed changes, citing a decline in revenue.

"We stress the need for a balanced approach that ensures both industry sustainability and revenue generation," Githua said.

The association reiterated the importance of striking a balance between taxation policies that support industry sustainability while safeguarding public health and revenue collection efforts.

As deliberations continue, Abak pledges to engage stakeholders and provide constructive input to ensure that the proposed changes do not inadvertently undermine the integrity of the alcoholic beverages sector.