Budget 2019: Alcohol, cigarettes, betting hit hard as sin tax comes into effect

Treasury Cabinet Secretary Henry Rotich has increased excise duty for alcohol and cigarettes by 15 percent in new government tax measures.

At the same time, gambling was also targeted and CS Rotich proposed a 10% excise duty on every amount staked as the government levied “sin tax” which will help generate an additional Ksh 37.0 billion, in tax revenue to the Exchequer.

The tax policy measures in this budget are expected to generate an additional Ksh 37.0 billion, in tax revenue to the Exchequer.

“Sin tax” is exclusively levied on goods/services deemed harmful to society such as alcohol and tobacco, soft drinks, fast foods, gambling and pornography.

“Mr. Speaker, betting has become widespread in our society and its expansion has had negative social effects, particularly to the young and vulnerable members of our society,” said Rotich.

“In order to curtail the negative effects arising from betting activities, I propose to introduce excise duty on betting activities at the rate of ten percent of the amount staked.”

On alcohol and cigarettes, The Cabinet Secretary proposed an increase on the rates of excise duty by 15% to address the decline on excise revenue and boost excise revenues.

“Mr. Speaker, excise duties on alcohol and tobacco will be increased as follows: a 750ml bottle of wine will have an excise duty of Ksh.136 which is Ksh.18 more from the current rate; the duty of a bottle of whisky will go up by Ksh.24 to Ksh.182 for a 750ml bottle. The excise duty on a packet of 20 cigarettes will increase by Ksh.8 to Ksh.61 per packet,” said CS Rotich.