The Kenya Revenue Authority (KRA) has begun enforcing a wide range of new and adjusted excise duties following the enactment of the Finance Act, 2025, with the changes taking effect from July 1.
The new measures target a broad scope of goods and services, from imported plastics and packaging materials to virtual asset transactions, alcohol, and digital betting. According to KRA, the revised excise structure is designed to boost revenue collection, support local manufacturing, and respond to Kenya’s evolving economic landscape.
Imported Goods Now Attracting Excise for the First Time
Among the key highlights of the new law is the introduction of excise tax on several imported goods that were previously untaxed. These include various forms of plastic and laminated polymer sheets, unbleached kraft paper, engraved or processed glass products, and aluminium profiles used in the construction sector. The rates range from Ksh50 per kilogram to Ksh500 per square metre, depending on the product category.
One of the more notable introductions is the taxation of fully built or semi-built direct air capture machines, which will now attract a 25 percent excise duty. Imported flavoured and unflavoured teas, non-refillable lighters, and aluminium doors and windows are also now subject to specific excise rates.
Cryptocurrency Transactions to Be Taxed
In a landmark move, Kenya has become one of the first African countries to formalise excise taxation on digital assets. Virtual asset transactions, including cryptocurrency trades, are now subject to a 10 percent tax on the excisable value.
This regulation is part of the government’s effort to bring the digital economy into the tax net and align with global trends in financial technology governance.
High-Strength Alcohol Faces Heavier Tax Burden
Another major change is the imposition of a Ksh500 per litre excise tax on spirits with alcohol content above 90 percent. The tax, which targets ultra-high-strength alcohol products, is aimed at discouraging the consumption of potentially harmful beverages that have become increasingly popular in informal markets.
Restructuring of Existing Excise Duties
KRA has also revised a number of existing excise duty rates and tax computation methods. For example, imported packaging products like cartons, boxes, printed labels, and glass bottles will now attract higher excise duties, with new charges based on weight or area rather than flat percentage values.
Importers of ceramic tiles and float glass will also see increases, with excise now calculated based on a hybrid formula of value or size, depending on the item.
Betting, Gaming, and Lotteries See Major Tax Shift
Significant changes have also been introduced in the taxation of betting and gaming services. Previously, these were taxed at 15 percent of the amount wagered or paid. Under the new law, a 5 percent excise will now apply to deposits made into betting, gaming, and lottery wallets. The revised approach is aimed at improving compliance and simplifying enforcement.
Prize competitions and non-charitable lotteries will similarly attract a 5 percent duty on participation fees or ticket costs, replacing the old model that taxed winnings and entry costs at a higher rate.
What This Means for Businesses and Consumers
With the new excise rates in force, all manufacturers, importers, and digital service providers affected by the changes are required to obtain or update their excise licenses. They must also apply the new rates to all taxable transactions.
For alcoholic beverages, excise tax returns must be submitted by the 5th of the following month. For all other goods and services, returns are due by the 20th.
The revised taxes are expected to impact multiple sectors, including packaging, construction, alcohol production, digital trading, and the gaming industry. Many businesses are anticipated to pass on the additional costs to consumers, potentially leading to price hikes on affected goods and services.
KRA has encouraged all taxpayers to familiarise themselves with the new provisions to ensure compliance and avoid penalties
