The directive by Treasury to levy excise duty on retail price of wines, spirits and beers that would have seen alcohol prices go up every three months is unworkable, says Kenya Revenue Authority (KRA)

As posted in the Sunday Nation, KRA’s head of marketing and communication Mr Kennedy Onyanyi said, “We have been having discussions with the treasury because we want guidelines on how to go about the new taxation. The regulation is still not clear like the system that we are currently using,”

In the current system tax is levied on the factory price.

As posted in the Daily Nation, the new alcoholic tax law compels the taxman to sample various retail prices on a quarterly basis in order to come up with an average price on which the excise duty will be based.

The new rule might see beer prices skyrocket.

KRA also notes that the alcoholic tax law violates the rule that taxation should be equitable.

“The new regulation seems a little bit subjective as opposed to being objective. A tax should be equally distributed and, as KRA, we do not want to appear as if we are imposing a burden on a certain category of consumers. Beer prices vary depending on the outlet, hence computation of the average retail price is a bit of a challenge,” said Mr Onyanyi.

Officials at Treasury have kept silence on the issue, opting to only say that talks are going on with KRA to resolve the issue, says the Sunday Nation.

Post sourced from the Sunday Nation