Commodity tax has become an unpleasant word in the aftermath of many products facing high taxes. With commodity prices skyrocketing over the past few months as a result of various factors, The Finance Act 2022, endorsed by President Uhuru Kenyatta will see some commodity prices increase to new highs, more so for the Kenyan youths.
In the new law, mobile phone prices will increase by 10 percent of their previous excisable value. This means that the prices of mobile phones will increase between Kshs. 700 and Kshs. 5,000 effective July 1st, 2022. Moreover, ready-to-use sim cards will be charged Kshs. 50 on their original prices.
“The first schedule of the Excise Duty Act, 2015 is amended by inserting the following new paragraph: excise duty on the importation of cellular phones shall be at ten percent of the excisable value,” reads part of the law.
Furthermore, Kenyan youth are expected to now pay more interest on their loans borrowed from digital lenders. This follows after a 20 percent excise duty has been levied on interest charged.
Sugar confectionery that has been imported into the country will be taxed Kshs. 40.37 per kilogram. Imported white chocolate will be levied Kshs. 242.29 per Kilogram.
The jewelry duty fee has also increased from 10 percent to 15 percent.
Alcoholic drinks have also been accounted for in this mass increased taxation. Beers and ciders will be charged Kshs. 134 per liter, Wines will be charged Kshs. 229 per liter and Spirits will be charged Kshs. 335.30 per liter. The excise duty will be taxed Kshs. 13.30 per liter, up from Kshs. 12.17 per liter.
The new law also imposed a 40 percent excise on electronic cigarettes and other nicotine delivery devices. A levy of Kshs. 70 per millimeter will now be charged on liquid nicotine for electronic cigarettes. Products containing nicotine and other nicotine substitutes intended for inhalation without combustion or oral application will be taxed Kshs. 1,500.
In light of increased taxes on all these products, it is worth noting that the government has lowered the Value Added Tax (VAT) imposed on the supply of L.P.G including propane. This is down from 16 percent to 8 percent. The price of refilling 6kg and 13kg gas cylinders will decrease by at least Kshs. 230
List of all new taxes in Kenya Uhuru wants you to pay (biznakenya.com)
However, the decision to lower the prices lies on the sellers who will have to wait until the slashed VAT reflects on their cost of acquisition.
The 25 percent excise duty levied on imported furniture of any kind used in offices and households as well as other general furniture has been abolished. In addition to that, all vehicles that undergo assembly in Kenya have now been exempted from Value Added Tax.