The cost of basic consumer goods is set to rise upon the adjustment of the rate of duty for inflation on October 1st.

Following an announcement of adjustments on the rate of excise duty by the Kenya Revenue Authority (KRA) Commissioner General, the average inflation rate is expected to go up 4.97%. This is the average inflation rate covering the 2020/21 financial year.

The excise duty adjustment which is in line with provisions of the 2015 Excise Duty Act has now been subjected to stakeholder input through public participation. This is ahead of the approval of the adjustment by National Treasury Cabinet Secretary Ukur Yatani.

The inflation adjustment is expected to impact the cost of all excisable goods and services. These include fuel products, beer, wines and spirits, food supplements, fruit juices, bottled water, cigarettes and its substitutes and motor vehicle imports.

Services covered under excise duty include telephone and mobile internet services alongside fees charged for money transfer services by cellular phone service providers, banks, money transfer agencies and other financial service providers.

The inflation adjustment to the rate of excise duty is meant to cover the tax Authority against revenue spillages emanating from inflation.

On the flip side, the greater cost of excisable goods will push up the rate of inflation, creating a cycle of higher excise duty rates annually.

Members of public and stakeholders are being called upon to make submissions on the inflation adjustment of specific excise duty rates by September 13, 2021.