Ice cream, juices and bottled water join ‘sin tax’ league to fund 3.3 shillings budget

The friends share a moment while enjoying their ice cream. [File, Standard]

Whether you choose to sit under a tree and sip that fruit juice, eat some ice cream, or just drink some water while reflecting on the rising cost of living, the government will always come in for a greater part of his taxes.

The details in the 2022 finance bill show that it will also get worse for the crafty bets to get rich quick.

And it won’t be any better for those who choose to apply cosmetics and wear jewelry to hide from the deteriorating state of the economy at the household level.

Treasury Cabinet Secretary Ukur Yatani is proposing higher taxes on fruit juices, bottled water, ice cream, chocolates, cosmetics and beauty products, beer, wine and cigarettes for fund the 3.31 trillion shillings budget unveiled last Thursday.

While Mr Yatani may have carefully selected what to include in his budget speech to give the impression that the government is in touch with the realities facing Kenyans, the finance bill says opposite.

The CS wants excise duty on fruit and vegetable juices to rise from the current 12.17 shillings per liter to 13.30 shillings, setting the stage for prices for these products to rise by at least 9.3 % from July.

Bottled drinking water will see the excise duty per liter increase from 6.03 shillings to 6.60 shillings, while ice cream and other edible ices – whether or not they contain cocoa – will be subject to a tax of 15 %.

Imported confectionery will see a tax increase from 3.63 shillings per kilogram to 40.37 shillings while the tax on white chocolate will increase from 209.88 shillings to 242.29 shillings per kilogram.

Jewelry, cosmetics and beauty products will also be subject from July to a 15% excise duty, a jump from the current 10%, also driving up consumer prices.

Beer and cigarette drinkers and gamers have also not been spared and will be under heavy pressure to raise the 300.96 billion shillings that are projected from excise duties alone.

The Treasury wants the tax on beer, cider, perry, mead, cloudy beer and mixtures of fermented drinks with soft drinks and spirit drinks with an alcoholic strength not exceeding six per cent. cent is taxed at 134 Sh per liter, against 121.85 Sh currently.

The rise of 12.15 shillings in excise duty per liter paves the way for the price of beer to rise by more than this margin once the inflation adjustment by the Kenya Revenue Authority (KRA) is made during the year.

The proposed price hikes could worsen the inflationary adjustment given that Mr Yatani, despite giving KRA authority to exempt certain products from this annual ritual, wants it to be done next year.

This means that the KRA will signal manufacturers and importers of excise goods this year to adjust prices upwards in line with inflation, without sparing excise goods falling under the specific rate category of the 2015 on excise duties.

Wines, including fortified wines and other alcoholic beverages made by fermenting fruit, will also benefit from a tax increase from Sh208.20 to Sh229 per litre.

Undenatured ethyl alcohol spirits and all other spirit drinks with an alcoholic strength above six per cent will begin to be subject to a tax per liter of 335.30 shillings from the current 278.70 shillings.

Mr. Yatani proposes to increase the excise duty on betting, gambling, prize competition and lotteries from 7.5% to 20%.

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