KENYA – Taxes for sugar-sweetened products and alcohol are expected to rise in 2024 as the government moves to promote healthy living by discouraging consumption.
Excessive sugar consumption has been historically associated with an increased risk of many diseases, including heart disease, type two diabetes, and is a major contributor to obesity.
The government now says it will review the tax regime for sugar-sweetened non-alcoholic beverages to base taxation on sugar content to discourage consumption and “prevent obesity and diet-related non-communicable diseases.”
The proposal will add to the recent one in which the State in July introduced a Sh242.29 per kilogram tax on locally manufactured sugar confectionery, including white chocolate, also citing the need to promote healthy living.
Alcohol has also been targeted for its direct association with a number of health risks including high blood pressure, heart disease, stroke, liver disease, and digestive problems.
The US Center for Disease Control has also linked alcohol consumption to a number of adverse health risks including injuries, such as motor vehicle crashes, falls, drownings, and burns.
Consumers of spirits and other higher alcohol-content products will be subject to an upward review in the coming financial year.
“Government will increase excise duty on spirits and other higher alcohol content products to discourage their consumption, as they pose higher health risks,” says the Treasury.
The Treasury says the tax hike will be informed by quantitative analysis to determine the optimal tax rate that will apply to each alcoholic product.
Taxes on cigarettes are also expected to rise as the government tries to promote healthy living and curb other negative effects such as addiction.
The tax hikes on cigarettes will affect both filtered and non-filtered cigarettes as well as other tobacco products in an effort to harmonize excise duty rates across all tobacco products to promote fairness.
“Given the negative health externalities of these products, the rates will be based on the extent of the externalities as well as recommendations of the ongoing East African Community partner states study”.
The disclosures in the draft three-year tax revenue strategy starting July 2024 will see tax rises, leading to an increase in the prices of listed products.