Excise duties

Requirement

Excise duty is imposed on the local manufacture or the importation of certain commodities and services. Excisable commodities include bottled water, soft drinks, cigarettes, alcohol, fuels, and motor vehicles. Excisable services include mobile cellular phone services, Internet data services, fees charged for money transfer services, and other fees charged by financial institutions.

Recently, through the Finance Act, 2018 (the Finance Act), there has been an increase in excise duty rates on wired telephone, money transfer services by banks, cellular phone service providers, and money transfer agencies.

The Finance Act also introduced some goods and services into the excise net, including sugar confectioneries (chocolates and chewing gum) at the rate of KES 20 per kilogram and Internet data services at the rate of 15% of the excisable value.

Another major change is the introduction of an annual inflationary adjustment for the specific excise duty rates. This was a departure from the previous requirement to adjust the rates after every two years. Subsequently, in December 2018, the specific excise duty rates for goods were adjusted upwards by 5.2%, with the exception of petroleum products.

M3 solution

For Kenya, this requirement is handled using charges in M3.

Configuration guidelines

Not applicable.