High Taxes on Alcohol & Cigarettes Push Kenyans to Cheap & Unsafe Alternatives
Bar owners and attendants around the country have decried increased excise taxes on alcohol stating it as a major cause of the shift in spending patterns among consumers.
Consumers have continued to downgrade to illicit alcohol and cheaper alternatives in a bid to counter the hike in alcohol prices.
A large percentage of customers consuming illicit alcohol report having been previous consumers of genuine alcohol and cigarettes before the increase in taxes.
According to government policy reviews, spirits have faced double annual excise tax increases since 2015.
Alfred Kiama, a bar attendant in Ruaraka who spoke to Kenyans.co.ke, recounts losing nearly half of his customers to cheaper wines and spirits dens within the area.
“More and more consumers are leaving due to increased prices; we cannot lower the prices because we have to keep up with the excise taxes. We continue to count losses but are optimistic business will look up.” Kiama stated.
However, Illicit alcohol constitutes the largest portion of alcohol consumption, amounting to more than half in the country.
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James Shitema, a brewer of local brew in Luanda, Vihiga county, implied that his customers have shown loyalty to the brew but there has been a little increase in the number of new faces frequenting the place.
Alcohol manufacturers have urged the State to lower excise taxes on alcoholic products to eradicate the consumption of illicit alcohol in the country.
“It is a nuisance and cumbersome. It is a burden on our cash flow and a burden on our overheads because we have had to create a whole new back office. We are lucky because we are a big organization and we can handle it and my worry is for a smaller business that would not have that capacity.” manufacturers stated during a past press conference.
Revenue from other products under the same tax category has however increased.
A report by the Kenya National Bureau of Statistics (KNBS) indicates that while excise taxes from beer and cigarettes declined over the past five years, revenue collected from taxes on such products as airtime increased by more than 50 per cent.
High Taxes on Alcohol & Cigarettes Push Kenyans to Cheap & Unsafe Alternatives
