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Kenya adjusts excise duty rates

Executive summary

Pursuant to Kenya’s Excise Duty Act 2015, both the Cabinet Secretary and the Commissioner General of the Kenya Revenue Authority are empowered to adjust excise duty rates.

The Cabinet Secretary may adjust (by increasing or decreasing) the rate of excise duty on excisable goods or services by an amount not exceeding 10%. Further, the Act empowers the Commissioner General to adjust specific excise duty rates annually because of inflation. The first inflation adjustments were introduced on 1 August 2018 by the Commissioner General via Legal Notice 164 which was later annulled in September 2018 by the National Assembly due to insufficient public participation.

In December 2018, both the Commissioner General and the Cabinet Secretary exercised their powers and effected new excise duty dates via Legal Notices 239 and 240.

Detailed discussion

The Legal Notice 239 (LN 239) increased the specific Excise Duty rates by 5.2% which was the average inflation rate for the 2017/2018 financial year. LN 239 had no specified effective date. However, it was dated 11 December 2018 and gazetted on 21 December 2018.

Below are the new rates introduced by the LN 239 dated 11 December 2018.

Description
Prior rate of Excise Duty (KShs)
New rate of Excise Duty (KShs)

Fruit juices (including grape must), and vegetable juices, unfermented and not containing added spirit, whether or not containing added sugar or other sweetening matter

Kshs10 per litre1

Kshs10.50 per litre

Bottled or similarly packaged waters and other non-alcoholic beverages not including fruit or vegetable juice.

Kshs5 per litre

Kshs5.20 per litre

Beer, Cider, Perry, Mead, Opaque beer and mixtures of fermented beverages with non-alcoholic beverages and spirituous beverages of alcoholic strength not exceeding 10%

Kshs100 per litre

Kshs105.20 per litre

Powdered beer

Kshs100 per kg

Kshs105.20 per kg

Wines including fortified wines, and other alcoholic beverages obtained by fermentation of fruits

Kshs150 per litre

Kshs157.80 per litre

Spirits of undenatured ethyl alcohol; spirits liqueurs and other spirituous beverages of alcoholic strength exceeding 10%

Kshs200 per litre

Kshs210.40 per litre

Cigars, cheroots, cigarillos, containing tobacco or tobacco substitutes

Kshs10,000 per kg

Kshs10,520 per kg

Electronic cigarettes

Kshs3,000 per unit

Kshs3,156.00 per unit

Cartridge for use in electronic cigarettes

Kshs2,000 per unit

Ksh2,104.00 per unit

Cigarette with filters (Hinge lid and soft cap)

Kshs2,500 per mille

Kshs2,630.00 per mille

Cigarettes without filters (plain cigarettes)

Kshs1,800 per mille

Kshs1,893.00 per mille

Other manufactured tobacco and manufactured tobacco substitutes; “homogenous” and “reconstituted tobacco”; tobacco extracts and essences

Kshs7,000 per kg

Kshs7,364.00 per kg

Motor cycles of tariff 87.11 other than motor cycle ambulances and locally assembled motor cycles

Kshs10,000 per unit

Kshs10,520 per unit

Condensates per 1000 litres @ 20°C

6,225.00

6,548.70

Motor spirit (gasoline) regular per 1000 litres @ 20°C

19,505.00

20,519.20

Motor spirit (gasoline) premium per 1000 litres @ 20°C

19,895.00

20,929.50

Aviation spirit per 1000 litres @ 20°C

19,895.00

20,929.50

Spirit type jet fuel per 1000 litres @ 20°C

19,895.00

20,929.50

Special boiling point spirit and white spirit per 1000 litres @ 20°C

8,500.00

8,942.00

Other light oils and preparations per 1000 litres @ 20°C

8,500.00

8,942.00

Partly refined (including topped crude) per 1000 litres @ 20°C

1,450.00

1,525.40

Kerosene type jet fuel per 1000 litres @ 20°

5,755.00

6,054.20

Illuminating kerosene per 1000 litres @ 20°C

7,205.0

7,579.60

Other medium oils and preparations per 1000 litres @ 20°C

5,300.00

5,575.60

Gas oil (automotive, light, amber for high speed engines) per 1000 litres @ 20°C

10,305.00

10,840.80

Diesel oil (industrial, heavy, black for low speed marine and stationary engines) per 1000 litres @ 20°C

3,700.00

3,892.40

Other gas oils per 1000 litres @ 20°C

6,300.00

6,627.60

Residual fuel oils (marine, furnace and similar fuel oils) of a kinematic viscosity of 125 centistokes per 1000 litres @ 20°C

300.00

315.60

Residual fuel oils (marine, furnace and similar fuel oils) of a kinematic viscosity of 180 centistokes per 1000 litres @ 20°C

600.00

631.20

Residual fuel oils (marine, furnace and similar fuel oils) of a kinematic viscosity of 280 centistokes per 1000 litres @ 20°C

600.00

631.20

Other residual fuel oils per 1000 litres @ 20°C

600.00

631.20

LN 239 adjusted excise duty rates for all excisable goods with specific excise duty rates including petroleum products. Cognizant to the fact that Value Added Tax had been introduced to the petroleum products in 2018 which resulted to increased cost of living, we opine that Legal Notice 240 (LN 240) was introduced to counter the increased excise duty on petroleum products by reducing the rates by 4.9% effective 12 December 2018. The resultant net of the two notices is that the excise rates on the petroleum products remain unchanged.

Below are the excise duty rates applicable on petroleum products as per the LN 240:

Tariff No.
Tariff description
Prior rate (KShs)
Rate per LN 239 (KShs)
Rate per LN 240 (KShs)

2709.00.10

Condensates per 1000 litres @ 20°C

6,225.00

6,548.70

6,225.00

2710.12.10

Motor spirit (gasoline) regular per 1000 litres @ 20°C

19,505.00

20,519.20

19,505.00

2710.12.20

Motor spirit (gasoline) premium per 1000 litres @ 20°C

19,895.00

20,929.50

19,895.00

2710.12.30

Aviation spirit per 1000 litres @ 20°C

19,895.00

20,929.50

19,895.00

2710.12.40

Spirit type jet fuel per 1000 litres @ 20°C

19,895.00

20,929.50

19,895.00

2710.12.50

Special boiling point spirit and white spirit per 1000 litres @ 20°C

8,500.00

8,942.00

8,500.00

2710.12.90

Other light oils and preparations per 1000 litres @ 20°C

8,500.00

8,942.00

8,500.00

2710.19.10

Partly refined (including topped crude) per 1000 litres @ 20°C

1,450.00

1,525.40

1,450.00

2710.19.21

Kerosene type jet fuel per 1000 litres @ 20°

5,755.00

6,054.20

5,755.00

2710.19.22

Illuminating kerosene per 1000 litres @ 20°C

7,205.0

7,579.60

7,205.00

2710.19.29

Other medium oils and preparations per 1000 litres @ 20°C

5,300.00

5,575.60

5,300.00

2710.19.31

Gas oil (automotive, light, amber for high speed engines) per 1000 litres @ 20°C

10,305.00

10,840.80

10,305.00

2710.19.32

Diesel oil (industrial, heavy, black for low speed marine and stationary engines) per 1000 litres @ 20°C

3,700.00

3,892.40

3,700.00

2710.19.39

Other gas oils per 1000 litres @ 20°C

6,300.00

6,627.60

6,300.00

2710.19.41

Residual fuel oils (marine, furnace and similar fuel oils) of a kinematic viscosity of 125 centistokes per 1000 litres @ 20°C

300.00

315.60

300.00

2710.19.42

Residual fuel oils (marine, furnace and similar fuel oils) of a kinematic viscosity of 180 centistokes per 1000 litres @ 20°C

600.00

631.20

600.00

2710.19.43

Residual fuel oils (marine, furnace and similar fuel oils) of a kinematic viscosity of 280 centistokes per 1000 litres @ 20°C

600.00

631.20

600.00

2710.19.49

Other residual fuel oils per 1000 litres @ 20°C

600.00

631.20

600.00

Endnote

1. Litre is used throughout this Alert as it is referenced in the Act.

EYG no. 000323-19Gbl

Download this Tax Alert as a PDF file.

 

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