The recent reduction in excise stamp prices by Tanzania and Uganda may lead to more Kenyans living near the border considering crossing over for a cheaper drink, as the cost of producing beverages in these neighboring countries decreases.
Tanzania’s decision to lower excise stamp prices, marking the second reduction, has notably lowered the cost of producing alcoholic beverages in Kenya’s neighboring nation.
Meanwhile, Kenya plans to double the price of these stamps, a move aimed at assisting the Kenya Revenue Authority (KRA) in offsetting a significant debt owed to SISCPA, the Swiss company responsible for manufacturing the stamps.
The Tanzania Revenue Authority (TRA) recently announced the new, reduced electronic tax stamp prices, following successful negotiations involving various stakeholders.
Similarly, in Uganda, adjustments to excise duties for beer producers have been made, with malt beer made from domestic raw materials now subject to a 30 percent excise duty or a minimum of Sh45 per liter, whichever is higher.
Comparatively, manufacturers in Kenya face excise taxes on beer that are up to four times higher than those in Uganda. Excise taxes account for over half of the cost of beer production in Kenya, amounting to approximately Sh97 per liter, while in Uganda, this figure is significantly lower at Sh23.85, equivalent to 27 percent.
Tanzania mirrors a similar scenario, with excise taxes making up around 36 percent of the total cost of beer production, translating to approximately Sh43.26.
These significant disparities in excise tax rates contribute to the higher prices of beer in Kenya compared to its neighboring countries. In Kenya, excise duty on a liter of beer stands at Sh142.44, whereas in Tanzania, it reaches a maximum of Sh59.
