A Mombasa-based Youth group has urged the National Assembly to increase taxes on alcohol in the new Finance Bill.
Appearing before the Parliamentary Committee on Finance and National Planning on Friday, June 7, 2024, the group identified as Youth Health Advocates urged the committee members to consider increasing taxes on alcohol.
The group further expressed concerns about the lowered rates for beer in the Finance Bill and has urged the committee to vary upwards the current rates for beer to discourage consumption by vulnerable groups.
According to the special committee, the youth said their push for taxes was to keep the drinks out of reach of young people, adding that alcohol was a major health concern.
“They welcomed the proposed increase on excise day on wines and spirits to help mitigate the health externalities caused by these drinks,” a statement by the committee read.
Alcohol tax proposals
In the 2024 Finance Bill, a 750 ml bottle of 37% alcohol by volume of a beverage gin in Kenya will now have an excise tax of Ksh444, up from Ksh267.
In contrast, a 500ml bottle of beer that used to have a tax burden of Ksh72 will now have one of Ksh51.
This means beers will considerably be cheaper than higher alcohol-content beverages.
The new changes seek to turn around taxation in the alcoholic beverage industry which previously depended on the volume of the product.
If the bill sails through Parliament, beverages with higher alcohol volume will be taxed higher than those with lower alcohol percentages.
Alcohol brands with over 40 per cent pure alcohol percentages will be hit hardest in the proposed tax schedule with producers already crying foul.
Speaking during the K24 TV breakfast show on May 23, 2024, the Alcoholic Beverages Association of Kenya (ABAK) faulted the increases, saying they would only serve to fuel the consumption of illicit alcohol.
In the new proposed law, the spirits excise tax is set to shoot by 79 per cent. The current rate is Ksh356 per litre of spirit and if passed this could reach Ksh640.
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