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Starting in 2024, enthusiasts of alcohol and sugar products will need to reach deeper into their wallets to indulge in these items, thanks to new tax measures.
The government is poised to raise taxes on a range of products, including alcohol, cigarettes, betting, and sugar-based goods, as part of a broader strategy to encourage healthier lifestyles and combat detrimental effects like addiction.
To deter consumption and address concerns linked to obesity and diet-related non-communicable diseases, the government aims to align taxation with sugar content.
In addition, the government has introduced taxes on domestically manufactured sugar confectionery, encompassing items like white chocolate, to advance healthier living.
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Previously exempt from new taxes, spirits and other high-alcohol-content beverages are now slated for tax hikes, a move motivated by the aim to reduce consumption due to their heightened health risks.
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To establish the optimal tax rate for each alcoholic product, the government will draw on quantitative analysis.
Furthermore, both filtered and non-filtered cigarettes, as well as other tobacco products, will face increased taxation. The government plans to standardise excise duty rates across all tobacco products to ensure equity.
Given the adverse health consequences associated with these products, the rates will be grounded in the magnitude of these detrimental effects and recommendations stemming from an ongoing study conducted by partner states within the East African Community.
Taxes on the betting and gaming sector
The betting and gaming sector is set to undergo tax adjustments, aimed at comprehensively addressing negative externalities. To enhance compliance, the government is actively working on achieving real-time revenue and data transmission.
This decision aligns with the government's contemplation of imposing restrictions on betting stakes, setting a minimum threshold of Sh20.
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READ: Kenyans hit by 2nd round of taxes from Finance Act 2023
This measure seeks to mitigate excessive gambling among young and vulnerable individuals who aspire to win substantial prizes with minimal wagers.
The taxes on sugar products are part of the new tax regulations introduced by the government, some of which have already been implemented.
Among these new taxes is the 'blank tape levy,' which took effect on September 15, 2023. The Blank Tape Levy is a fee imposed on items that have the potential for private copying of copyrighted content.
It constitutes a specialised tax or levy applied to purchases of recordable media like mobile phones, CDs, DVDs, USB drives, and similar items.