On Tuesday, June 21, President Uhuru Kenyatta assented to several bills including the controversial Finance Bill 2022 that will take effect on Friday, July 1.
With the start of a new Financial Year, Kenyans will have to dig deeper into their pockets to afford some of basic commodities whose prices are set to go up following an increase in production cost and taxation rates.
For instance, all phones are slated to go up after the state starts charging a higher duty of 10 per cent on all imports. "Excise duty on the importation of cellular phones shall be at 10 per cent of excisable value," reads the Finance Act 2022 in part.
The cost of mobile phones will rise by between Ksh700 and Ksh5,000 effective July 1, 2022. In addition, the new law imposes a Ksh50 charge per ready-to-use sim card.
The public will also have to dig deeper into their pockets come July 14 after the National Treasury announced that the subsidy which had been keeping the price of fuel per litre manageable likely to be removed.
A litre of petrol, which now retails at Ksh159.12 up from Ksh150.12, is expected to cross the Ksh200 mark in line with global prices.
Diesel, which is retailing at Ksh140 up from Ksh131 and kerosene which costs Ksh127 up from Ksh118.94 per litre, are also expected to follow suit, hence increasing the cost of production across several industries.
In the Finance Act 2022, wines will also shoot up after attracting Ksh229 excise duty per litre, which is an increase from Ksh208.20. Spirits with an alcoholic rate of 6 per cent will also see a price spike to Ksh335.30 of excise duty per litre from Ksh278.70.
Also affected is beer which has attracted a rate of Ksh134 per litre from Ksh121.85. Tobacco also so a surge in its excise duty from Ksh1,500 to Ksh3,750.
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 state also increasing the rate of advertising on all platforms cutting across mainstream media, TV, print and radio as well as billboards which will now pay excise duty of 20 per cent from 15 per cent.
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 general, imported products will also see an increase in prices after companies noted that importation costs had tripled since the beginning of the year.
Price Drop
In retrospect, basic household products are expected to see a reduction in prices led by maize flour which is set to reduce by Ksh2 after a three-month steady rise. This is after Agriculture Cabinet Secretary, Peter Munya, lifted levies on the importation of maize.
In the Finance Act 2022, the Head of State also directed that the Value Added Tax (VAT) charged on cooking gas be reduced from 16 per cent to 8 per cent.
Bread prices are also scheduled to go down after the Parliament rejected a proposal to increase taxes on wheat flour over the ongoing Ukraine war. A similar increase in excise duty was also shot down for raw materials used in the manufacture of cooking oil.
Fertiliser prices are also expected to lower after it was exempted from any taxes.
Excise duty on bottled water and non-alcoholic beverages, however, remained constant alongside that targeting boda bodas.
