Nairobi — The Bar Owners Association of Kenya has opposed the proposed plan to increase taxes on alcoholic drinks arguing that it will encourage the consumption of counterfeit alcohol and illicit brews.

A proposal in the Finance Bill, 2022 seeks to increase taxes for beer, spirits, locally manufactured glass, and alcohol advertisements.

The Association Secretary-General Boniface Gachoka, who spoke after a meeting in Nakuru, says that the Finance Bill will further hurt the sector which is struggling to recover from the effects of covid-19.

The sector lost Sh150 billion and 250,000 employees since the start of the pandemic.

Speaking after a meeting in Nakuru, the members of the association claim that 44 percent of the market share of alcohol consumed in the country goes to illicit brews which do not generate revenue for the government.

The association is set to meet with the Finance Committee of the National Assembly this Friday to convince them not to pass the Bill.

Similarly, beer distributors have decried that increasing the taxes would negatively affect a sector that is barely recovering from the initial ravages wrought by the Covid-19 pandemic, which resulted in bar closures and job losses.

Speaking at a press conference in Nairobi, the distributors also told MPs "it should not be business as usual" as they consider the Finance Bill in their last days before the House adjourns indefinitely ahead of the General Election.

The Bill proposes to increase Excise Duty on beer by 10 per cent, on spirits by 20 per cent, and on locally manufactured glass by 25 per cent.

There is also a proposal to impose 15 per cent excise duty on advertisements for alcohol.

"The proposed increase is ill-informed and untimely as it will ultimately increase the cost of doing business for the entire sector and affect the entire supply chain from farmers, transporters, manufacturers, distributors, bottle makers, consumers, and retailers," said Maina Gikonyo, the Managing Director of Rwathia Distributors.

Accompanied by other distributors from Nairobi, Gikonyo said the taxes would result in an increase in prices that are likely to drive down demand for legal alcoholic beverages and affect a sector that is yet to recover from the wounds of similar actions in the past.