Excise duty is a tax charged on specific goods and services manufactured locally or imported, on varying rates. In Kenya, it is charged in both specific rate where a specific amount of tax is charged per unit of measure on an excisable product, and ad valorem rate where a percentage rate of duty is charged on the value of an excisable product. Generally, ad valorem rate is used where the objective is to raise revenue whereas specific rate is used to correct externalities. All manufacturers, providers and importers of excisable goods and services are requited to pay excise duty.
The excisable goods and services are mostly those considered to be luxurious, addictive, goods having negative effects and those that have low price elasticity, among others. Most of the excise taxes are levied on a specific rate base. These include, but not limited to, spirits, other alcoholic beverages (beer and wine), tobacco, soft drinks (water, juices, and non-alcoholic beverages), motor cycles, fuel oils, kerosene and plastic bags. All excisable services, food supplements, cosmetics and beauty products, and motor vehicles are charged on ad valorem rate.
Goods and services subjected to excise duty
Description | Rate of duty |
Juices | 7% of the excisable value |
Mineral water, ice blocks | 5% or Ksh 3 per litre |
Sodas | 7% of the excisable value |
Cosmetics | 5% of the excisable value |
Petroleum jelly | 5% of the excisable value |
Other non-alcoholic beverages | 7% of the excisable value |
Malted Beers | Ksh 54 per litre |
Beers not made from malt | Ksh 45 per litre |
Wine | Ksh 70 per litre or 50 % of the excisable value |
Spirit | Ksh 120 per litre or 65 % of the excisable value |
Mobile Cellular phone services | 10% of the excisable value |
Other wireless telephone services | 10% of the excisable value |
Plastic shopping bags | 50% of the excisable value |
Processed Tobacco | 130% of the excisable value |
Cigarette excise duty in Kenya
Category | Description | Rate of excise duty per mille |
A | Plain cigarettes or plain cigarettes RSP of up to Ksh 2,500 per mille | Ksh 700 |
B | Soft cap cigarettes of < 72 mm or soft cap cigarettes with RSP of Ksh 2,501 – 3,500 per mille | Ksh 1,000 |
C | Soft cap cigarettes of > 72 mm or Soft cap cigarettes with RSP of Ksh 3,501 – 4,500 per mille | Ksh 1,500 |
D | Hinge lid or RSP of more than Ksh 4,500 per mille | Ksh 2,500 |
Note: (RSP means Retail Selling Price, 1 mille equals 1000 sticks)
I couldn’t find clearly on which type of products excise duties were applicable.
Maybe could you help me. I am interested by the following products:
– Milk powder
– Instant coffee powder (Nescafé type)
– Cocoa powder