KRA seeks public feedback on 2025 draft excise duty rules

The Kenya Revenue Authority (KRA) has opened a public consultation on the Draft Excise Duty (Remission of Excise Duty) (Amendment) Regulations, 2025, which propose significant changes to the taxation framework for alcoholic beverages in Kenya.

According to a statement shared on X (formerly Twitter), the draft regulations have been prepared by the Commissioner General on behalf of the Cabinet Secretary for National Treasury and Economic Planning.

KRA is inviting members of the public, industry professionals, and other relevant stakeholders to review the draft and provide their comments by June 17, 2025.

"In line with the governing Act, the Commissioner General encourages interested individuals, experts, and stakeholders to submit their views and suggestions to help finalize the regulations," the Authority said.

The draft document is available for download on the KRA website.

Feedback can be sent to the Commissioner General, Kenya Revenue Authority, P.O. Box 48240-00100, Nairobi, or emailed to [email protected].

The proposed amendments represent a major update to Kenya’s excise duty remission policy, broadening remission benefits beyond beer to now include wine and spirits for the first time.

This initiative is part of a wider government strategy to encourage the use of locally sourced agricultural products in the production of alcoholic beverages.

The updated regulations introduce clear definitions for industry roles, including “compounders” entities that flavor spirits without distillation and establish tighter rules on compliance and packaging.

For instance, beer manufacturers are required to use at least 75% locally grown ingredients such as cassava, millet, or sorghum.

They must also follow prescribed price controls and package their beer in containers no smaller than 30 litres.

Spirit producers, including both distillers and compounders, can qualify for up to an 80% excise duty remission, provided their products are made from Kenyan raw materials and meet specific alcohol content requirements.

Spirits must be sold within a price range of Sh1,000 to Sh1,200 per litre, and compounders must source ethanol exclusively from licensed distilleries.

Similarly, wine makers must use a minimum of 75% local agricultural content, package their products in bottles of at least 750ml, and sell at retail prices between Sh600 and Sh800 per litre.

Manufacturers benefiting from these remission incentives will be obligated to submit detailed monthly reports and adhere to public health and regulatory standards.

Failure to comply may result in loss of remission benefits and the imposition of full excise duty.

The proposed regulations underscore the government’s commitment to formalizing the alcohol industry, backing local farmers, and encouraging value addition in manufacturing.