Local alcohol manufacturers have opposed the proposed advance excise duty in the Finance Bill 2023, which is aimed at managing illicit alcohol in the country.
In a statement on Friday, June 23, the Alcoholic Beverages Association of Kenya (ABAK) stated that the proposal will hurt innocent legal manufacturers.
“Our members have remained compliant in remitting excise duty, playing their part in building Kenya’s economy even in the current tough economic times. Implementing the advance payment effectively is a counterproductive, unperceptive move that will hurt legal manufacturers debilitatingly and benefit illicit alcohol dealers who do not pay taxes, anyway,” ABAK chairman Eric Githua stated.
He argued that the proposal should have been subjected to public participation and taken the views of alcohol stakeholders.
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Githua noted that government should unearth the source and movement of ethanol in the war against illicit alcohol.
“You do not stop errant alcoholic beverage dealers by making it harder for legal manufacturers. The government should be doing all it can to unearth the source and movement of ethanol and eventual making of this harmful alcohol.
“So far, it is evident that the Government’s efforts at curbing illicit alcohol as it continues to lose approximately Ksh 71 billion annually as established by the recent study by Euromonitor. How will this move make things better?” posed Mr Githua.
He further stated that if the proposal is approved, manufacturers will be forced to review the contracts that they have with their distribution networks so as to comply adding that it will create a strain on the value chain.
