East African Brewery limited has protested high taxation noting that it will affect final consumers.
The annual tax increment on alcoholic drinks will be a setback for consumers who are already grappling with high food and fuel prices.
Kenya Breweries Limited managing director Jane Karuku said that
If disposable income is challenged through taxation, then the bottom of the pyramid will hurt the most.
According to the beer maker, increasing an already difficult tax base will make it harder for the consumer, chasing them to illicit brews and eroding recent gains from reinforcement
This will further endanger lives and deny the government revenues it is already making from regulated alcohol consumption.
Kenyan firms are the third most-taxed in the six-nation East African Community (EAC) bloc after Tanzania and Burundi, a survey by financial consultancy PricewaterhouseCoopers (PwC) shows.
The PwC Paying Taxes 2019 report released Wednesday showed that a business in Nairobi paid a total tax contribution rate (which includes labour and other tax deductions) of 37.2 per cent of its profit in 2017, from 37.1 per cent in 2016.
This is only higher than Tanzania’s 44 per cent and Burundi’s 41.2 per cent the report, which uses a medium-sized domestic company to calculate taxes on businesses, shows.
Firms in EAC’s newest member country, South Sudan, pay the lowest average tax rate of 31.4 per cent on profit, followed by Rwanda (33.2 per cent) and Uganda (33.7 per cent). Kenya’s tax regime is also higher than some of its biggest competitors for foreign direct investments (FDIs) such as South Africa (29.1 per cent), Ghana (32.4 per cent) and Nigeria (34.8 per cent).