This article summarises the requirements for the 80% excise duty remission under the Excise Duty (Remission of Excise Duty) Regulations, 2026 (2026 Regulations) made under the Excise Duty Act, Chapter 472 of the Laws of Kenya (Excise Duty Act).
The 2026 Regulations were published in the Kenya Gazette on 1 April 2026 and entered into force on 1 April 2026. The 2026 Regulations repeal the Excise Duty (Remission of Excise Duty) Regulations, 2017 (Repealed Regulations) made under the Excise Duty Act.
Under the 2026 Regulations, the Cabinet Secretary for the National Treasury (Cabinet Secretary) (may impose additional conditions to manufacturers that had been granted the 80% or 90% excise duty remission under the Repealed Regulations. The manufacturer would be required to comply with the additional conditions within six months from the date of being notified of the additional conditions.
Scope of the 80% excise duty remission
The 2026 Regulations authorise the Cabinet Secretary to grant 80% excise duty remission with respect to beer, spirit or wine made from sorghum, millet, cassava or any other agricultural produce (Eligible Raw Materials), except sugarcane and barley, grown in Kenya. At least 75% of the Eligible Raw Materials must have been grown in Kenya. The 2026 Regulations when compared to the Repealed Regulations:
- expand the products eligible for the 80% excise duty remission to include wine and spirits. Under the Repealed Regulations, the excise duty remission applied only in relation to beer;
- retain the 80% excise duty remission percentage that had been under the Repealed Regulations;
- retain the requirement that at least 75% of the Eligible Raw Materials must have been grown in Kenya; and
- do not contain the 90% excise duty remission that had been in the Repealed Regulations in relation to beer where a manufacturer:
- invested at least KES 5 billion in the manufacture of beer; and
- entered into an agreement with the Government of the Republic of Kenya. The maximum period for the 90% excise duty remission was for five years from the date of commencement of the manufacture of beer.
Returns for manufacturers granted the 80% excise duty remission
A licensed manufacturer that is granted the 80% excise duty remission would be required to file returns with the Kenya Revenue Authority (KRA) once every three months. This is an expansion from the monthly requirement under the Repealed Regulations.
Revocation of the 80% excise duty remission
The Cabinet Secretary has authority to revoke the 80% excise duty remission where the licensed manufacturer does not comply with the Excise Duty Act or the 2026 Regulations. On revocation of the remission, the full excise duty remitted including penalties at the rate applicable to outstanding tax arrears would be due and payable by the licensed manufacturer from the date of the non-compliance.
Conditions for qualifying for the 80% excise duty remission
The table below summarises the key conditions that licensed manufacturers must satisfy to qualify for the 80% excise duty remission under the 2026 Regulations, including the general requirements applicable to beer, wine and spirits, as well as the product-specific pricing, packaging and other requirements.
Conditions for grant of the 80% excise duty remission under the 2026 Regulations | ||||
General requirements applicable to beer, wine, and spirits Tax compliance, including compliance with the electronic tax invoicing requirements (eTIMS), a valid excise licence for the relevant product (beer, wine or spirits), installation of the Excisable Goods Management System, a list of contracted farmers in Kenya supplying the Eligible Raw Materials, and a verification framework to confirm that the product was manufactured using the Eligible Raw Materials. | ||||
Other requirements | Beer | Wine | Spirits (distilled) | Spirits (compounded) |
Maximum price per litre | KES 150 (increase from the KES 100 under the Repealed Regulations). | KES 750 | KES 350 | KES 500 |
Packaging requirements | Pressurised container of at least 30 litres or other capacity as approved by the Cabinet Secretary in relation to beer. | Packing in a container of at least one litre capacity or such other capacity as approved by the Cabinet Secretary in relation to beer.
Labelling ‘WINE UNDER EXCISE DUTY REMISSION ’ | Packaging in a container of at least 250 litres capacity. | Packing in a container of at least 250 millilitres.
Labelling ‘SPIRITS UNDER EXCISE DUTY REMISSION’ |
Other requirements |
| Installation of a flowmeter regulated at 20 degrees centigrade at the discharge point to a compounder unless exempt under the Act. |
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