Wine prices to go up, beer to fall on fresh tax plans
Wine prices are expected to rise while that of beer would drop as the National Treasury made fresh proposals to set excise duty on beverages based on their respective alcohol contents by volume.
The fresh proposals are part of recommendations backed by the International Monetary Fund
Wine prices are expected to rise while that of beer would drop as the National Treasury made fresh proposals to set excise duty on beverages based on their respective alcohol contents by volume.
The proposed Tax Laws (Amendment) Bill, 2024 has sought to restructure the rate of excise duty for wines and beers in a move that will see the price of wines go up while the cost of beers and ciders with alcohol content not exceeding six per cent will fall.
The fresh proposals, which were previously in the rejected Finance Bill, 2024 are part of recommendations backed by the International Monetary Fund (IMF) which on Thursday disbursed a further Sh78.3 billion ($606 million) to Kenya under an ongoing loan programme with the country.
“The Bill makes the following amendment, restructure in the rate of excise duty for wines including fortified wines and other alcoholic beverages obtained by fermentation of fruits from Sh243.43 per litre to Sh22.50 per centilitre (10 millilitres) of pure alcohol,” the National Treasury said on Friday.
The average alcohol content of wine ranges between 11 and 13 per cent. Low-alcohol wines have an alcohol by volume (ABV) of 10 per cent or less while high-alcohol wines can exceed 20 per cent.
A one-litre wine bottle with 20 per cent ABV for instance will attract Sh450 in excise duty from Sh243.43 at present, an increase of Sh206.57.
The fresh proposals nevertheless hand relief to consumers of beers and ciders with up to six per cent ABV as the effective excise duty paid on the beverages drops.
Excise duty on beer brands such as Tusker and White Cap (500ml bottles) with an ABV of 4.2 percent each will for instance fall to Sh47.25 from Sh71.22 at present.
