The Finance and National Planning Committee proposed the amendments that were approved by the National Assembly on Wednesday evening, mandates KRA to set minimum prices for alcohol.
Following the modifications, the 2010 Alcoholic Drinks Act will now be a part of the written laws governing revenue after originally being included in the 1995 Kenya Revenue Authority Act.
By publishing notices in the gazette, they grant the taxman the authority to establish and modify the price of alcoholic beverages.
The 2010 Alcoholic Drinks Act was further amended, and the minimum input cost definition was added. This definition now refers to the input cost that KRA issued through excise regulations.
The Act has also been amended to prohibit the sale, production, packaging, or distribution of alcoholic beverages below the minimum input cost.
Kuria Kimani, the head of the Finance and National Planning Committee, made the amendment motion and said that KRA would be in a good position to control the minimum price of alcoholic beverages given its expertise in the pricing of ethanol, the primary ingredient in their production.
“The Kenya Revenue Authority will be given the responsibility of determining the minimum price that a certain drink may be set at since this provision establishes the minimum input cost price for alcoholic beverages in the nation. This intends to eliminate illegal alcohol sold to our youth,” the speaker stated.
The government loses roughly Ksh71 billion ($506 million) in taxes annually from the sale of illicit alcohol, according to a recent analysis by Euromonitor Consulting.
If found guilty of selling alcoholic beverages for less than the required minimum price, the offender faces a fine of up to Ksh50,000 or a jail sentence of up to six months, or both. Selling alcoholic beverages in containers smaller than 250mm is also prohibited for those who work in the alcohol value chain.
