What Kenyans need to know about new KRA excise duty changes

Kenyans purchasing certain goods and services need to be aware of new excise duty changes introduced by the Finance Act 2026, effective July 1, 2026. The Kenya Revenue Authority (KRA) has updated guidelines outlining the changes, which impact a wide range of products, from bottled water and fruit juice to imported sugar and antique vehicles.

The removal of excise duty on bottled water applies to manufacturing and importation from July 1, 2026. Previously stamped water can still be sold with the original stamps, but businesses holding unused V4 excise stamps for bottled water must return them to KRA following the prescribed process. Businesses producing new bottled water will no longer require an excise licence.

For fruit and vegetable juice, excise duty rates differ based on whether sugar or a sweetener is added. Duties remain at Ksh14.14 per litre for juices without added sugar, but increase to Ksh20 per litre for those with added sugar or sweetener. Manufacturers, importers, and retailers must accurately classify products and update their records accordingly.

Imported sugar now faces a higher excise duty rate of Ksh40 per kilogram, with exemptions for raw sugar intended for licensed refiners and sugar imported by registered pharmaceutical manufacturers.

Antique vehicles registered at least 30 years prior, valued at Ksh10 million or more, excluding depreciation, now incur a 50 per cent excise duty. Betting companies dealing with deposits or credits for betting purposes, including horse racing, must revise their systems and accounting records to accurately capture qualifying transactions. Businesses handling imported sugar as an input must factor in the new rate when calculating production and import costs.