The government has always turned to alcoholic manufacturers to raise revenue to finance their budget and this year is no different.

In his budget proposal, National Treasury Henry Rotich increased tax on alcoholic spirits by 14% while at the same time increasing duty on low-cost beers such as EABL’s Senator Keg.

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In what has now become to be known as ‘sin tax’ CS Rotich announced introduced the tax rate for spirits from Sh175 per litre to Sh200 per litre.

The move comes at a time when the customer base for spirits increased rapidly in the last few years, which the government has targeted as a source of revenue for financing the country's ever expanding budget.

Beer prices

While the National Treasury did not introduce new taxes on beer, it plans to introduce an inflation adjustment that will drive up the cost.

“While the taxation of beer has not changed, the inflation adjustment that will be effected from 1st July this year will increase government revenue in line with inflation,” Rotich said.

However, in an attempt to reign in on the consumption of of illicit brews, the government proposed an 80 per cent suspension of excise duty for locally manufactured beer made from locally produced sorghum, millet or cassava or any other produce, excluding barley.

Manufactures of low-cost beers from sorghum, millet or cassava were in 2015 handed a reprieve after the tax remission was increased from 50 per cent to 90 per cent through the Alcoholic Drinks Control (Amendment) Act.