Nairobi – The Bar Hotels Liquor Traders Association of Kenya (BAHLITA) has urged the government not to increase excise duties on alcoholic beverages as this will further cripple the sector which is recovering from the effects of Covid-19.
This comes ahead of the excise duty inflation adjustment planned by the Kenya Revenue Authority (KRA), which is expected to increase taxes on alcoholic products from 1 October.
Speaking to the media, the Secretary General of BAHLITA, Boniface Gachoka, noted that the increase in the tax on alcoholic products will encourage people to opt for other cheaper alternatives which in most cases are illicit beers.
“We are totally against the plan to increase the prices of beer and other alcoholic beverages. When you increase the price of legal alcohol, you push our customers to drink illicit beers such as chang’aa”, a he declared.
He further requested the new candidate for the Ministry of National Treasury and Planning, Njuguna Ndungu, to look into the matter once installed in his office as the sector is not yet fully recovered and another upward revision rates could even force businesses to close. completely quite.
“During the Covid-19 period when our entities were closed, we lost over 100 billion shillings and laid off 250,000 industry workers. When you want to add alcohol prices again for the third time, we have reckoned from our survey that we will ask around 80,000 of our employees, where will they go? This will also lead to the closure of around 12,000 clubs, where will these businessmen go?” asked Gachoka.
The BAHLITA General Secretary noted that the Kenya Kwanza manifesto, the main objective of which was to uplift small businesses, will not be achieved if taxes are revised upwards for the third time, as this has pushed the alcohol from neighboring countries on the market as they are quite affordable.
“As alcohol sellers, we support barley growers and the tax increase will affect them as well. The previous increase resulted in lower demand which resulted in lower sales. This will force us to reduce the number of workers we have. This will have a ripple effect on the whole value chain,” Gachoka added.
He noted that the sector is still in talks with the government and will announce the next decision on October 1.
KRA Commissioner General Githii Mburu previously indicated that tax rates on items such as beer, wine and cigarettes will be adjusted using the average inflation rate for the 2021/2022 financial year. six point three percent (6.3 percent).
The new rates will see taxes for two bottles of beer rise from Sh134 to Sh142.4, while excise duty for wines will rise to Sh243.4 for 208 liters from Sh229 and Sh356.4 for 278. liters of alcohol from 335 Sh.