More Pain as Govt Increases Tax on Popular Products Among Kenyan Youth

  • President Uhuru Kenyatta assenting to bills at State House on March 30, 2021.
    President Uhuru Kenyatta assenting to bills at State House on March 30, 2021.
    PSCU
  • Kenyans will be forced to dig deeper into their pockets after the government increased tax on some of the products popular among the youth.

    The Finance Act 2022, assented to law by President Uhuru Kenyatta, introduced a 10 per cent exercise duty on imported cellular mobile phones.

    This will see the cost of mobile phones rise by between Ksh700 and Ksh 5,000 effective July 1, 2022. In addition, the new law imposes a Ksh50 charge on per ready-to-use sim card.

    A person using a mobile phone
    A person using a mobile phone.
    Twitter

    "The First Schedule to the Excise Duty Act, 2015 is amended by inserting the following new paragraph: excise duty on importation of cellular phones, shall be at ten per cent of the excisable value," the law reads in part.

    The new law also imposed a 40 per cent excise tax on electronic cigarettes and other nicotine delivery devices. A levy of Ksh70 per millilitre will now be charged on liquid nicotine for electronic cigarettes.

    The tariff imposed on alcoholic beverages will now be Ksh134 per litre for beers and ciders, Ksh229 per litre of wine and Ksh335.30 for spirits. The excise duty on fruit juices will move from Ksh12.17 up to Ksh13.30 per litre.

    The government also increased the tariff on jewellery from the current 10 per cent to 15 per cent. Products containing nicotine or nicotine substitutes intended for inhalation without combustion or oral application will be taxed Ksh1,500.

    Imported sugar confectionary will be levied at Ksh40.37 per kilogramme while a similar unit of imported white chocolate will be charged Ksh242.29.

    In addition, the youth will be forced to pay higher for loans borrowed from digital lenders after the government introduced a 20 per cent excise duty on the interest charged.

    However, the government scrapped the 25 per cent excise duty imposed on imported furniture of any kind used in offices and households and other general furniture. Locally manufactured passenger vehicles will be exempted from valued added tax (VAT).

    In addition, the new legislation lowered the VAT imposed on the supply of liquefied petroleum gas including propane by half from 16 to eight per cent. This will see the price of refilling six and 13-kilogram gas cylinders drop by at least Ksh230. 

    However, the decision to lower the prices further lies with the sellers who will have to wait until the slashed VAT reflects on their cost of acquisition.

    File photo of Gas Cylinders on display at an outlet in Nairobi City
    File photo of Gas Cylinders on display at an outlet in Nairobi City
    File
    alcohol