The Kenya Revenue Authority (KRA) is set to effect a 5.17% annual inflation tax adjustment on excise duty on some products. This will surely add salt to the injury of consumers who already feel the pinch of higher cost of basic food items due to delay of the long rains season earlier this year. The products largely affected are likely to be fuel, alcohol, cigarettes and motorcycles.

The deputy commissioner for corporate policy at KRA said that the taxman had already sent a gazette notice to the government printer for publication in accordance with the implementation of the inflation tax adjustment which stipulates that they should make the said adjustment at the beginning of each financial year, in this case last Monday.

As much as last year’s inflation rate was set at 5.2%, KRA did not make a uniform adjustment across all excisable products as some like bottled water set at 4% while beer and spirits received full adjustment of 5.17%. KRA went ahead to notify manufacturers pretty early this year, in mid-June way earlier stating that the adjustments would be taking effect 1^st of July unlike last year where it took effect on 1^st August.

This year’s adjustment in numbers means that some products like fuel will face an upward adjustment of shs. 1.02 per liter for super petrol and shs. 0.53 for diesel and kerosene. Having been spared last year due to the introduction of VAT on petroleum products about the same time in September, a tax partner at KPMG Kenya, Mr. Clive Akora expects fuel not to escape the upwards adjustment this time round.

Other products affected in this year’s adjustment include motorcycles which will be up by shs. 543 from shs. 10,520 per unit, beer up by shs. 2.72 per half liter bottle to shs. 110.64, wines and spirits up by shs. 8.16 and shs. 10.88 respectively. Fruit juice and bottled water weren’t spared either as their prices would be adjusted by shs. 0.54 and 0.26 upwards respectively.

Several proposals from the National Treasury cabinet secretary, Mr. Rotich through the Finance Bill promise a further 15% tax hike on filtered and unfiltered cigarettes. If successful, the tobacco products are set for a double price increase considering their price adjustments by shs. 136 per mille for filtered and shs. 98 per mille for unfiltered cigarettes.

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