State asked to revise current tobacco excise duty structure
The civil society wants the government to simplify the excise tax regime for cigarettes, where filtered and non-filtered cigarettes are currently levied differently.
Celine Awuor, a programme officer at the International Institute for Legislative Affairs (IILA) proposed that after collapsing the two tier tax bands into one, a 15 per cent duty be charged on the current highest rate of filtered cigarettes, increasing the price across board to Sh3,630 per 1,000 sticks.
Last year, the government slapped a 15 per cent excise duty on cigarettes through Excise Duty Act 2019 for the two bands, increasing the price of the filtered cigarettes to Sh3,157 per 1,000 sticks while that of plain cigarettes went up to Sh2,272 for 1,000 sticks.
She said the proposed measures will encourage smokers to quit the habit, discourage youngsters from beginning as well as assist Kenya progress towards achieving the World Health Organisation (WHO)’s objective of getting governments to impose a 70 per cent sin tax on the retail price of cigarettes, making them expensive for consumers to buy.
Corporate sector
Awuor was speaking yesterday at an Institute of Economic Affairs (IEA) sponsored pre-budget corporate sector presentation for the financial year 2020/21 themed: “Unlocking Economic Potential by Harnessing The Big Four Agenda.”
She said the two-tier tax regime gave room for cigarette manufacturers to re-position their products and cheat the system by having products fall under the lower tax band rates.
The raft of proposals also included levying a new 10 per cent excise tax on sweetened sugar beverages.
