The European Business Council (EBC) Kenyan chapter on Thursday, February 2, called on President William Ruto's government to suspend the planned increase in the excise stamp rates.
The council sounded an alarm noting that such a decision would adversely affect Kenyan products and the purchasing power of the general consumers.
EBC Kenya was responding to calls by the Kenya Association of Manufacturers (KAM) whose traders asked the Head of State to rescind the decision to increase the rates of excise stamps.
"We support the Kenya Association of Manufacturers (KMA) on this and we also would like the government to put this on hold as it will no doubt have serious financial repercussions for businesses here," European Business Council (EBC) Kenya warned the government.
Kenya Association of Manufacturers advised that such high tax rates will make local products less competitive compared to regional goods.
The high tax rate will automatically be passed down to the final consumer by producers and importers of alcoholic drinks.
At the same time, KMA lamented that the recent 6.3 per cent adjustment for inflation that came into effect in October 2022 made Kenyan products more expensive.
The Kenyan Government makes around Ksh2.9 billion from excise stamps after the last review done in 2017 during former President Uhuru Kenyatta's administration.
President William Ruto, in December 2022, asked tax collectors to maximise their collection to around Ksh6 Trillion.
In the call by the Head of State, tax collectors are required to double their tax collection from the current Ksh3 Trillion to more than Ksh6 Trillion.
Ruto noted that Kenya has the capacity to increase its collection through a concerted effort by everyone including major businesses associated with politicians.
Tax collection became a major point of discussion after President Ruto claimed that those pushing Azimio la Umoja leader Raila Odinga to stage political rallies are tax evaders.
Speaking to Senators in Mombasa on Thursday, February 2, Deputy President Rigathi Gachagua stated that the government will negotiate with tax evaders.
He also warned tax evaders that the presidential administration will not relent in ensuring that everyone pays their taxes.
"Let them negotiate with us and they will be allowed to pay something like Ksh1 billion per month, but everyone must pay taxes," Rigathi explained.
