Home Education Reopening Of Bars Lift Collected Beer Taxes To Record Ksh.28.6 Billion

Reopening Of Bars Lift Collected Beer Taxes To Record Ksh.28.6 Billion

The full-scale reopening of bars, restaurants and other entertainment establishments helped lift tax collections from the sale of beer to a record Ksh.28.6 billion last year.

This represents a 49.7 per cent jump in excise duty collections from the sale of beer from Ksh.19.1 billion in 2020.

Of all alcoholic beverages, beer was the worst-hit product during the partial closure of physical drinking joints as part of measures to contain the spread of the COVID-19 pandemic.This is as the sale of beer remains largely reliant on physical trading.

Nevertheless, excise duty collection from the sale of wines and spirits also recovered to post nettings of Ksh.16.1 billion from Ksh.15.7 billion in the same period.

Total excise duty collections across the year meanwhile rose by 27.7 per cent to Ksh.131.1 billion from Ksh.102.7 billion previously.

The rising netting is mirrored by the performance of alcoholic beverages manufacturer East African Breweries Limited (EABL) more than doubled its half-year profit through six months to December 2021 to Ksh.8.7 billion from the recovery of sales.

EABL’s turnover in the period was up by 23.5 per cent at Ksh.54.9 billion from Ksh.44.5 billion.

All excise duty categories recorded an increase in nettings year over year but for airtime which posted a 20 per cent decline to Ksh.29.8 billion.

The slump in excise duty collection from airtime likely points to reduced talk times by Kenyans on the backdrop of an increase in the rate of duty charged on airtime in July last year.

The government is backing itself to collect more taxes from the sale of alcoholic beverages this year with proposals to raise specific rates of the duty.

The 2022 Finance Bill, currently under the public participation stage for instance proposes to lift duty for beer not exceeding six per cent by alcohol strength to Ksh.134 per litre from the current Ksh.121.85 while that of spirits with alcohol content above six per cent proposed at Ksh.335.30 from the current Ksh.278.70.

Both the Kenya Breweries Limited (KBL) and the Alcoholic Beverages Association of Kenya (ABAK) have opposed the planned hikes at the ongoing public participation sessions with the National Assembly Committee on Finance and National Planning.

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