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Thursday, January 16, 2020
Boon for brewer as 'sin' tax is slashed
Dominic Omondi
East African Breweries Ltd (EABL) has received a major boost for its new
Kisumu plant after the government exempted excise tax on alcohol made
from sorghum, millet and cassava by 95 per cent.
This as EABL prepares to commission the Sh15 billion plant that will
use selected white sorghum varieties to brew a million tonnes of its
low-end beer – Senator Keg.
Initially, beer made from the agricultural produce was exempted from excise tax by 90 per cent.
This means that the retail prices for Keg brew, which targets low-income consumers, will go down.
The Excise Duty (Remission of Excise Duty) (Amendment) Regulations,
2019, allows the manufacturers of beer made using these cereals to make
an application to the Cabinet Secretary for National Treasury to grant
remission of excise duty at 95 cent.
The new taxation regulations, said Cabinet Secretary Ukur Yatani, came
into effect in July last year. This means that EABL will go for refunds
for any of the additional excise taxes it paid on its Senator beer from
then to December 18 when the regulations were published. This, however,
is on condition that “the manufacturer shall invest at least Sh5 billion
in the manufacture of the beer.”
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