MOMBASA, Kenya, Jul 24 – Coast Bottled Water Manufacturers Association has called for a review of the introduction a new tax regime that takes effect on August 1, 2018.
The tax changes are contained in the new Finance Act, in which, water manufacturers will be forced to pay Sh0.2 on Excisable Goods Management System duty and additional Sh0.5 Stamp Duty.
Michael Otieno, the chairperson of the Coast Bottled Water Manufacturers Association, said these additional taxes will mean an increase on the operational cost.
“An increase in our operational cost will mean an increase in the price of the bottled water. Therefore, it is the consumer who is going to suffer,” said Otieno.
He says Kenyans will be forced to buy the bottled water at a higher price moving forward.
Currently, a 300ml bottle of water goes for Sh15, but it will jump to Sh25, a 500ml bottle of water will trade at Sh30 up from Sh20 if the new taxes are imposed.
“We want these new taxes to be scrapped or reviewed altogether,” said Ochieng.
Otieno adds that if the excise duty is implemented the 1.25ltr bottle will cost Sh70, up from Sh50 while the 1.5ltr bottle will cost Sh75 up from Sh55.
10ltr bottle will jump from Sh200 to Sh300 while the 20ltr bottle will cost Sh500 from Sh300.
Another member of the association, Ahmed Mohamed, said the increased taxes will make operational costs unbearable to the companies forcing them to downsize their workforce or close shop altogether.
There are 120 bottled water companies at the Coast, which have employed about 1,600 people across the region and nationally. Countrywide, there are about 600 bottled water companies.
“We will see more than 1,600 people employed in these smaller water companies rendered jobless. Instead of the government helping us in job creation, they want us to close shop,” he said.