Cost of living to double before January 2020, KRA doubles excise duty

KRA boss expected to collect 2.5 Trillion in 2019/2020 financial year. PHOTO | SG

TAXMAN to increased excise duty to processed products of Ksh. 2.65 sold at any distributor and Ksh 2.80 for any item produced at the manufacturing level. The cost of living to go higher again as the manufacturer will pass the burden to the consumer.

Bottled water, soda, processed juices, and cosmetics are set to cost more beginning September 1 when the Kenya Revenue Authority (KRA) implements a new tax system on a long list of consumable goods.

KRA has set a target to raise Sh4.6 billion more revenue from the new tax system, which the Kenya Association of Manufacturers (KAM), however, says its members will pass on to consumers. Kenyans will press to the end to raise funds for the Country' debt.

The revenue agency, which has a new commissioner-general, is under pressure to collect Sh1.87-2.5 trillion in taxes in the current financial year, up from the Sh1.65 trillion it was expected to rise in the just-ended financial year.

The taxman has made it mandatory for all manufacturers to install the Excisable Goods Management System (EGMS), which they say will cost up to Sh2.80 per item of production, adding up to billions of shillings across industries.

"We had proposed that the costs (including the cost of the stamps) be recovered from excise tax collections. If manufacturers cannot manage to absorb these costs, it definitely means that they will have to be passed down to consumers.

"It will become prohibitively expensive for the common man to afford basic goods added with the high inflationary cost of living in a very price-sensitive economy," said KAM chief executive Phyllis Wakiaga in an interview Thursday.

It also comes after the Lands ministry directed all county lands to be rated and be taxable. 

Taxman also eyes petroleum products through ERC.  The government is keen on making sure the debt is paid before the agreed Time elapsed.

" Anybody attains 18 years old is a taxpayer. Through the huduma number, the government will expand tax brackets and collect more to meet the government target." KRA new James Githii Mburu boss stated.

The cost of living is expected to double by the end of December 2019.