Alcohol producers have expressed their opposition to the government’s decision to require them to pay excise duty within 24 hours of removing their products from the stockroom.
According to them, the action, which purportedly was intended to stop the illicit alcohol trade without prompt consultation with stakeholders, is more likely to end up encouraging it.
“The proposal was not taken through public participation, it was only inserted in the Finance Bill by the National Assembly’s Finance Committee after a submission by the illicit alcohol prevention taskforce,” Alcoholic Beverages Association of Kenya (ABAK) says in a statement.
Further, it claims that the action will punish innocent parties as a result of the state’s shortcomings in controlling illicit alcohol.
According to ABAK Chairman Eric Githua, the current model, in which producers remit the tax following the reconciliation of sales, is effective and does not require the implementation of the provision.
“Our members have remained compliant in remitting Excise Duty, implementing the advance payment scheme is a counterproductive, unperceptive move that will hurt legal manufacturers,” Githua said.
The organization contends that the plan should have been subject to public input and industry players’ opinions should have been solicited as it requires them to make significant changes to their working methods yet was not included in the original Finance Bill.