Bar owners ask MPs to reject proposed taxes on alcohol

The Bar, Hotels, and Liquor Traders Association (BAHLITA) has faulted the proposed increase in excise duty on beer and spirits.

If adopted, the lobby group says, it will lead to an increase in the illicit alcohol trade as Kenyans will smuggle cheaper products from other markets.

The Treasury through the Finance Bill 2022 proposed to increase excise tax for alcoholic beverages; beer (10 percent), spirits (20 percent), glass bottles (new excise tax at 25 percent) and 15 percent on advertising fees for alcohol products.

Lobby chairman Simon Njoroge noted that the government should be cognizant of the current hard economic times that Kenyans are going through and not burden them further through harsh laws that risk pushing thousands of Kenyans out of jobs.

The proposed excise duty will not only affect manufacturers, and farmers but also businesses and consumers.

“We are opposed to the move by the government to increase the excise duty on alcohol products as this will put a further strain on the purchasing power of consumers, increase in the cost of doing business as well as encourage uptake of illicit alcohol.

Read also: Fresh excise tax on hospitality sector will sabotage post-Covid-19 jobs recovery

As concerned businesses and citizens, we wish to urge Parliament to reject these proposals in line with the recommendations of the report by the National Assembly’s Committee on Finance and Planning.” Mr Njoroge noted.

In addition, the lobby group has sent a petition to MPs, protesting any further amendments to the finance and planning committee report recommendations.

The group has indicated that they are aware of MPs who proposed to increase taxes on alcoholic beverages beyond what was initially proposed in the Finance Bill 2022.

“Such proposals have not gone through public participation in accordance with Article 118 of the Constitution of Kenya and also Article 201 (a) which specifically deals with public participation in financial matters. Therefore, such proposals violate the public participation framework as enshrined in the Constitution of Kenya and National Assembly Standing Orders and we intend to legally challenge such amendments if passed,” added Mr Njoroge.

As a remedy, the lobby group has asked the government to focus more on working with relevant stakeholders to weed out illicit alcohol trade.

Through collaborative engagement, the government has been able to reduce the level of illicit trade from 56 percent in 2012 to 44 percent in 2018.

Early last week, the Glady’s Wanga-led Finance Committee shot down the proposal by Treasury to increase the taxes on alcoholic beverages.

It cited the need for the government to give the sector time to recover from the effects of COVID-19 which has had adverse effects on their operations since 2020. This happened even as IMF and National Treasury are said to be mounting pressure on Parliament to increase taxes amid escalating cost of living.

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