Excise Duty - Quartet Consulting

EXCISE DUTY IN KENYA:

Last reviewed – 26 February 2025

Overview

Excise duty is levied on the manufacture, importation, or local supply of specific goods and services under the Excise Duty Act (EDA), Cap 472.

Excisable Goods & Services

Category	Examples
Excisable Goods	Bottled water, soft drinks, cigarettes, alcohol, fuels, motor vehicles
Excisable Services	Telephone & Internet data services, money transfers, financial institution fees

Key Amendments & Updates

1. Tax Laws (Amendment) Act, 2020

Clarified “other fees” earned by financial institutions, limiting excise duty to licensed activities only.

2. Finance Act, 2021

Reintroduced excise duty (7.5%) on betting & gaming (horse racing was later exempted).

3. Finance Act, 2023

Service	Previous Rate	New Rate
Telephone & Internet data services	20%	15%
Money transfer fees (banks & financial providers)	20%	15%
Money transfers (cellular & payment service providers)	12%	15%
Alcoholic beverages & gaming ads (TV, print, billboards, radio)	N/A	15%

Removed annual inflationary adjustments on excise duty rates.
Strengthened penalties on excise stamp violations.

4. Tax Laws (Amendment) Act, 2024 (Effective 27 Dec 2024)

New Provisions:

Defined “digital lenders” under the Excise Duty Act.A “digital lender” is defined to mean “a person holding a valid digital credit providers license issued by the Central Bank of Kenya”;

Introduced excise duty on digital services supplied by non-residents.
Extended payment timeline for excise duty on alcoholic beverages from 24 hours to the 5th day of the following month.
Exempted “fertilized eggs for incubation” from excise duty.

Newly Taxed Items:

Item	Rate
Imported electric transformers & parts	25%
Imported ceramic sanitary fixtures (sinks, washbasins, baths, toilets, etc.)	35% of customs value or KES 100/Kg
Imported float & polished glass sheets	35% of customs value or KES 200/Kg
Imported ceramic tiles & finishing ceramics	35% of customs value or KES 300/Kg
Coal	5% of value or KES 27,000/MT

Excise Duty Rate Adjustments for Gaming & Betting Services:

Service	Previous Rate	New Rate
Betting	12.5%	15%
Gaming	12.5%	15%
Prize competition	12.5%	15%
Lottery (excluding charitable lotteries)	12.5%	15%

Clarification on Digital Lender Fees as per the TLAA Amendment:

Now includes “fees, charges, or commissions” on licensed activities.
Excludes interest, loan returns, insurance premiums, or profit-sharing fees

EXCISE DUTY IN KENYA:

Key Amendments & Updates

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