Kenya Introduces New Excise Duty on Imported Goods and Online Advertising
The Kenya Revenue Authority (KRA) has announced new excise duties on imported goods and digital advertising, set to take effect from December 27, 2024. These changes, introduced under the Tax Laws (Amendment) Act, 2024, will impact manufacturers, importers, and businesses in advertising, betting, and gaming.
If your business imports electric transformers, printing ink, ceramic products, float glass, plastics, or coal, or if you advertise alcohol or betting services on social media, these new tax measures will affect you. Here’s a detailed breakdown of the changes and what businesses need to do to comply.
Excise Duty on Imported Goods
The following imported products will now attract excise duty at varying rates:
| Product | Tariff Code | Excise Duty Rate |
|---|---|---|
| Electric transformers and parts | 8504.10.00 – 8504.34.00 | 25% |
| Printing ink (excluding EAC partner states) | 3215.11.00, 3215.19.00 | 15% |
| Ceramic sinks, basins, toilets, sanitary fixtures | 6910 | 5% or Kshs. 50 per kg |
| Float glass and polished glass | 7007 | 35% or Kshs. 200 per kg |
| Ceramic tiles and finishing ceramics | 6907 | 5% or Kshs. 200 per square meter |
| Coal | N/A | 2.5% of the customs value |
| Saturated polyester (imported) | 3907.99.00 | 20% |
| Vinyl acetate polymers | 3905.21.00 | 20% |
| Emulsion-styrene acrylic | 3903.90.00 | 20% |
| Printed paper and paperboard (excluding EAC partner states) | 4811.41.90, 4811.49.00 | 25% or Kshs. 150 per kg |
| Plastic packaging materials | 3923.30.00, 3923.90.90 | 10% |
These new tariffs will likely lead to higher prices for imported construction materials, packaging products, and printing materials. Businesses in the construction, manufacturing, and retail industries should plan accordingly to manage cost increases.
Excise Duty on Online Advertising for Alcohol and Betting
A 15% excise duty will now apply to advertisements on social media and digital platforms that promote:
- Alcoholic beverages
- Betting, gaming, lotteries, and prize competitions
This means businesses running Facebook, Instagram, Google, or other digital ads for these industries will now need to pay an additional 15% tax on their advertising spend. This change is expected to impact the digital marketing budgets of alcohol brands, gaming companies, and advertisers in Kenya.
Compliance Requirements for Businesses
To comply with these new tax regulations, affected businesses must:
- Obtain the necessary licenses – Manufacturers, importers, and service providers must apply for an Excise License, Import Certificate, or Registration Certificate from KRA.
- Charge and collect excise duty – Businesses must apply the new excise duty rates from December 27, 2024.
- File excise tax returns on time – Excise duty must be remitted to KRA by the 20th of each month for taxes collected in the previous month. The first tax return is due by January 20, 2025.
How Will These Changes Affect Businesses and Consumers?
- Manufacturers and Importers: Higher excise duties on raw materials like printing ink, glass, plastics, and ceramics could increase production costs, potentially leading to higher retail prices.
- Retailers and Consumers: Prices of ceramic tiles, sanitary ware, glass, and packaging materials may rise, affecting the construction and home improvement sectors.
- Advertising and Marketing Firms: Brands that advertise alcohol or betting services on social media will see higher ad costs, potentially reducing marketing spend.
Final Thoughts
Kenya’s new excise duty on imported goods and digital advertising is set to impact multiple industries, from construction and manufacturing to advertising and gaming. Businesses should review their supply chains, adjust pricing strategies, and ensure compliance with KRA regulations to avoid penalties.
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