Alcohol manufacturers reject advance excise tax plan 

KENYA – Kenya’s alcoholic beverage manufacturers have strongly opposed a government proposal requiring them to pay excise duty within 24 hours of removing goods from storage, warning it could fuel the illicit alcohol market. 

The Alcoholic Beverages Association of Kenya (ABAK) stated that the policy, included in the Finance Bill, 2023 by the National Assembly’s Finance Committee without public participation, unfairly targets compliant businesses instead of addressing the root causes of illicit alcohol production. 

According to ABAK Chairman Eric Githua, the current model—where manufacturers remit excise duty after reconciling sales—is effective and ensures consistent compliance.  

He argued that advance tax payment would place a heavy financial burden on legitimate producers while giving illicit traders, who do not pay taxes, a competitive edge. 

“Implementing the advance payment is counterproductive and will severely impact legal manufacturers while benefiting illicit alcohol dealers,” Githua said, adding that members have remained tax-compliant even in challenging economic times. 

Excise duty, a consumption tax, is charged at the point of consumption, and alcoholic products typically move through a network of distributors and retail outlets before reaching the consumer. The proposed change was based on a recommendation from the Illicit Alcohol Prevention Taskforce. 

ABAK contends that the amendment represents a major operational shift for manufacturers and should have undergone the public consultation process required by law. 

The tax proposal comes alongside broader regulatory changes under consideration. On July 30, 2025, the National Authority for the Campaign Against Alcohol and Drug Abuse (NACADA) unveiled a policy framework that includes raising Kenya’s legal drinking age from 18 to 21 years. 

Under NACADA’s plan, individuals below 21 would be prohibited from buying, handling, or consuming alcohol, and would not be allowed entry into alcohol-selling premises, even when accompanied by adults. 

The proposals also call for banning alcohol sales and consumption in certain public and sensitive locations, such as beaches, parks, hospitals, sports venues, transport hubs, highways, restaurants, clubs, and educational institutions. 

In addition, retail methods including vending machines, online sales, home delivery, hawking, and distribution through child-associated outlets like toy shops would be prohibited. 

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