KRA Announces Removal of Excise Duty on Bottled Water [Details]

The Kenya Revenue Authority (KRA) has announced the removal of excise duty on bottled water following changes introduced under the Finance Act, 2026.

In a notice on Monday, July 6, the agency said the amendment took effect on July 1.

KRA confirmed that the removal of the tax also eliminates the requirement for excise stamps on bottled water produced or imported from the effective date.

"Bottled water manufactured or imported on or after this date will not be subject to excise duty and will not require to be affixed with excise stamps," the notice read.

KRA stated that it will soon provide guidance on how businesses should handle unused excise stamps following the tax change.

"The Commissioner will issue detailed guidelines on the return of unutilized stamps and the decommissioning of digital stamps, which will be published on the official KRA website," the notice added.

Despite the removal of the excise duty, KRA reminded manufacturers that they are still required to comply with their tax obligations for the period before the amendment came into force.

"Manufacturers are reminded of their obligation to submit their Excise Duty Returns for the month of June 2026 and pay the taxes due by 20th July, 2026," the notice further read.

This comes days after KRA announced the implementation guidelines for a new tax amnesty programme following the coming into force of the Finance Act, 2026.

In a statement on Friday, July 3, the agency said the initiative is aimed at easing the financial burden on taxpayers, encouraging voluntary compliance, and helping individuals and businesses regularize their tax records before the end of the year.

"Re-introduced under the Finance Act, 2026, this initiative waives 100% of penalties, interest and fines on tax debts accrued up to 31st December 2025. The amnesty window opens on 1st July 2026 and closes strictly on 31st December 2026," the statement read.

KRA noted that the latest programme follows two successful amnesty exercises that helped boost revenue collection while bringing thousands of taxpayers back into compliance.

"This builds on the success of the previous two amnesty cycles, which successfully recovered Kshs. 80.9 Billion in principal tax payments while regularizing thousands of taxpayers," the statement added.

Under the guidelines, taxpayers who had already settled their principal tax liabilities by December 31, 2025, will automatically receive a full waiver of outstanding penalties and interest without submitting an application.

KRA also announced relief for taxpayers facing only late filing penalties; those with no outstanding principal tax will qualify for automatic waivers once they file all pending tax returns.

For taxpayers with unpaid principal tax accrued before 2026, KRA said paying the entire amount during the amnesty period will immediately trigger a waiver of all corresponding penalties and interest.

Those unable to make a one-time payment can instead apply for a structured payment plan through the KRA iTax system. 

However, all principal taxes under such arrangements must be fully paid by December 31, 2026, for the taxpayer to qualify for the waiver.

KRA clarified that the amnesty does not cover tax obligations arising from January 1, 2026, onwards; such liabilities, together with any associated penalties and interest, remain fully payable under the law.