PHONE USERS SEEKING TO REPLACE OR REGISTER AFRESH SIM CARDS TO PAY THIS AMOUNT.

A Member of Parliament affiliated to Deputy President William Ruto’s Kenya Kwanza coalition on Thursday evening proposed higher taxation on beer and a new duty on imported SIM cards in changes to the Finance Bill 2022 that were being debated last evening.

Kikuyu MP Kimani Ichung’wah sought to increase excise duty on beer, wine and spirits by between 20.2 percent and 25.6 percent, opposing the recommendation by the National Assembly Finance Committee, which reversed the Treasury’s proposals to raise alcohol taxes.

In a raft of amendments largely seen to have the blessings of the Ruto-led Kenya Kwanza coalition, Mr Ichung’wah also proposed a new Sh50 excise duty on every imported ready-to-use SIM card.

The proposals, if adopted, will see the tax on a litre of beer rise 23.1 percent to Sh150 from the current Sh121, which will increase the price of a bottle of beer by Sh15.

Mobile phone users seeking to replace or register afresh will pay more for the product, with the mobile telephony market a key target for raising billions of shillings in taxes. Presently, Safaricom charges Sh50 for replacement and fresh SIM listing.

The amendments by Mr Ichung’wah contradicted the recommendation by the Finance and Planning Committee, chaired by Gladys Wanga (Homa Bay), that the current taxes on alcohol be retained in the financial year starting July.

“Treasury [officials] were given the proposals and they did not oppose,” said Mvita MP Abdulswamad Nassir, who is the chairman of the National Assembly Public Investments Committee (PIC).

The higher duties proposed by Mr Ichung’wah come weeks after the MP said the Kenya Kwanza Alliance would shoot down the Finance Bill, 2022, arguing that additional taxes will burden households.

Mr Ichung’wah is an ardent supporter of Dr Ruto, who has fallen out with President Uhuru Kenyatta, a stance that saw the Kikuyu lawmaker dropped as chair of the Budget Committee in 2020.

Dr Ruto is battling for the presidency against veteran opposition leader Raila Odinga, who this time has the support of his former political foe, President Kenyatta.

Mr Ichung’wah’s alcohol taxes are higher than the duties proposed by Treasury Cabinet Secretary Ukur Yatani.

The Treasury had proposed to raise excise duty on beer to Sh134 per litre, Sh229 for wine and Sh335.30 for spirits.

Lawmakers were yet to make a decision on the new taxes by the time this paper went to press.

The Wanga-led committee had rejected Mr Yatani’s proposal on grounds that higher taxes on alcohol will push prices beyond the affordable levels and could result in increased uptake of illicit brews.

“Increase in excise duty on beer may increase uptake of illicit brew. Additionally, the excise rate…had been revised in the Finance Act 2021, and should therefore be given some time before review,” the committee on Finance on May 24.

The committee’s recommendation was largely seen as aimed at not upsetting voters ahead of the August polls.

Sin taxes on cigarettes and alcohol have traditionally been the target of finance ministers for additional revenue, but in recent years the pool has been widened to include widely used items such as bottled water, cosmetics, confectionery, motorcycles and petroleum products.

By Business Daily