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Maina Gikonyo, MD Rwathia Distributors/COURTESY

Kenya

Increasing tax on alcohol now is wrong timing, beer distributors tell KRA

NAIROBI, Kenya, Sep 11- A section of beer distributors in the country has decried plans by Kenya Revenue Authority (KRA) to increase the Excise Duty rate with 5 percent on 31 alcoholic beverages starting next month. 

Speaking during a press conference on Friday, Rwathia Distributors Limited Managing Director Maina Gikonyo said the move by KRA is not timely considering the bad economic environment the country is facing due to the coronavirus pandemic.

Maina called on KRA and the National Treasury to reconsider the proposal to allow the sector to get back on its feet first, even as the economy begins to reopen.

“Increasing Excise Duty at this point is also likely to erode the intentions and the gains made with the other measures the government instituted to cushion Kenyans against the economic vagaries brought about by the pandemic,” Maina said.

“In an economy struggling to work its way out of the difficult circumstances of the past six months, more efforts should be made to enable businesses to get back on their feet.”

Jukoma Enterprise Limited Director Muthoni Wamuya stated that the sector is hoping that President Uhuru Kenyatta will reopen bars and night clubs in his next address but raised concerns that the sector will face difficulties getting back on track if the increased taxes take effect at the same time.

“The spending power has reduced significantly and things are totally different on the ground. We are all trying to survive. We would appreciate this if the economy was thriving but having this increase at this time and specifically on the alcohol industry literally kills the sector,” Wamuya said.

Bars and clubs have remained closed since mid-March, as one of the containment measures that the government took to curb the spread of the Coronavirus in the country.

On July 27, President Uhuru Kenyatta ordered the indefinite closure of bars nationwide amid concerns that bars, entertainment joints and lounges have been operating in violation of COVID-19 restrictions.

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During his address to the nation following a summit with the Council of Governors, the President directed the Inspector General of Police Hillary Mutyambai to permanently withdraw licenses of bars that will violate the new directive.

“All bars shall remain closed until further notice. The Inspector-General of Police shall withdraw all licenses for bars operating in breach of this directive and the withdrawal shall be permanent,” the Head of State ordered.

The President also directed police officers not to spare anyone while implementing the COVID-19 guidelines, regardless of their social or political status.

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