Kenyans should now brace themselves as the Kenya Revenue Authority (KRA) prepares to have them get taxed on drinking water and beverages such as juices and soda starting September.
This move by KRA has reportedly been made to enable the taxman to raise an additional 3.6 billion shillings from the excise tax.
From September 1, manufacturers of bottled water, energy drinks, juices, soda, non-alcoholic beverages, and cosmetics will have to comply with the new tax adjustments.
The treasury has been setting targets for revenue collection which the Kenya Revenue Authority has always failed to meet.
The higher tax collection on water and beverages comes in KRA’s effort to try and meet these set targets.
KRA has in the past failed to role out the Excisable Goods Management Systems (EGMS) but on July 9, it “notified the public of the go-to live of the excisable management system on bottled water and other non-alcoholic beverages and cosmetics according to Section 28 of the Excise Act,2015”, through its commissioner for domestic taxes Elizabeth Odundo Meyo.
The authority is set to carry out discussion sessions in which it intends to offer room for public and sector-based participation.
Consumers are likely to be affected by this tax management should the prices of these commodities rise in the event that manufacturers pass the tax compliance to them.
By the deadline of filing returns, KRA had still not met their revenue collection target. In the current financial year, Treasury CS Henry Rotich expects 1.87 trillion shillings from the taxman.
From excise tax, CS Rotich expects that the taxman collects up to 242.2 billion shillings in the current financial year.