Excise Revenue from Beer Sector Drops Amid Alarming Gaps in Compliance
Kenya has recorded its steepest fall in domestic excise tax revenue since the COVID-19 pandemic, driven by a significant decline in tax payments from the beer and tobacco industries.
According to data released by the Kenya Revenue Authority (KRA) on July 14, 2025, cited in Eastleigh Voice, tax receipts from excisable goods fell by 5.75% in the 2024/25 financial year, decreasing to Sh69.39 billion from Sh73.62 billion the previous year.
This marks the first year-on-year decline in domestic excise collections since 2019/20, when pandemic-related restrictions caused a 6.39% drop. The KRA confirmed that the beer and tobacco sectors were the primary cause for this year’s decline. Excise tax revenue from beer manufacturers fell sharply by 13.9%, while cigarette firms saw an 8.9% decrease.
Tax Revenue Misses Target as Alcohol Industry Avoids Paying Fair Share of Taxes
According to Eastleigh Voice, KRA’s revenue collection fell short of its revised target of Sh71.38 billion by 2.80%, highlighting both shortfalls in tax compliance and weaknesses in the domestic alcohol industry. Excise taxes are applied to a wide range of goods and services, including beer, liquor, wine, cigarettes, soft drinks, airtime, and cosmetics. However, the beer sector’s practices to lobby against alcohol taxes and avoid paying a fair share of taxes has had an outsized impact on overall tax performance.
The sharp decline in beer-related tax revenue raises wider concerns about the role of the alcohol industry in undermining Kenya’s development objectives. The products and practices of multinational alcohol companies operating in Kenya cause a significant burden on health systems, reduces workforce productivity, and contributes to social harms, especially for children from families with alcohol problems and people with alcohol use disorder.
Research has consistently documented how better alcohol taxation can support health promotion and economic stability. For example, a study noted that a 50% increase in alcohol taxes could avert over 21 million deaths globally while raising nearly US$17 trillion in revenue. As partner of the new WHO-led “3×35 Initiative”, Movendi provides key resources about the quadruple-win of alcohol taxation: preventing and reducing harm and costs, generating revenue, financing health and development priorities, and advancing health equity and social justice.
Lost Excise Stamps Raise Red Flags About Illicit Alcohol Supply
Adding to the concern is the Auditor-General’s report revealing that 9.68 million excise stamps were unaccounted for in the financial year ending June 2024. According to East Leigh Voice, the type of stamps, the timing of the loss, and details of any investigation remain undisclosed. This lack of transparency has sparked fears of widespread tax evasion in the alcohol industry and a surge in counterfeit alcohol products.
President William Ruto had earlier raised concerns about fake excise stamps, citing intelligence reports of collusion between KRA officials and the alcohol industry to produce counterfeit stamps. In fact, according to Eastleigh Voice, he highlighted that Kenya issues just 2.9 billion excise stamps annually, less than a third of its estimated potential of 10 to 12 billion. In comparison, Uganda issues 9 billion and Tanzania 7 billion stamps despite having smaller economies.
It is unacceptable that Kenya is selling a measly 2.9 billion excise stamps annually compared with Tanzania’s seven billion and Uganda’s nine billion despite the two economies being smaller than Kenya’s,” said President Ruto, as per Eastleigh Voice reporting.
William Ruto, President, Kenya
These alarming discrepancies suggest that illegal alcohol supply and tax evasion in the alcohol industry are significantly undermining alcohol policy initiatives, public health outcomes, and government revenue.
A Case That Reveals Big Alcohol’s False Claims
The steep drop in excise tax revenue from beer signals a deeper problem: a poorly regulated alcohol market that fails to contribute its fair share to the nation, especially considering the heavy burden of alcohol harm the products and practices of the alcohol industry are causing to Kenyans. It also reveals the self-interested claims by alcohol industry lobbyists when they pushed for lowering alcohol taxes and succeeded with the beer tax decrease. Thirdly, the alcohol industry is fueling illicit trade with their non-compliance with the Kenyan tax stamps.
These three points illustrate the government made a mistake in treating multinational beer giants preferentially when setting alcohol excise taxes as part of Kenya’s Finance Bill discussions.
Prioritising people’s health, community well-being, and societal progress through evidence-based alcohol taxation as recommended by the World Health Organization and the RESET Alcohol Initiative, including enhancing compliance systems, is the way to go foe the Kenyan government, instead of following Big Alcohol’s siren songs that clearly lead to reduced tax revenue, while alcohol harm grows.
Support for government action, especially regarding alcohol taxes
The RESET Alcohol Initiative survey in Kenya revealed people’s grave concerns about alcohol harm, the price and presence of alcohol in communities, and people’s desire for policy action by the government.
- 90% – the vast majority – of Kenyans, see alcohol as a problem.
- 78% of Kenyans consider alcohol consumption to be a major problem.
- 77% of Kenyans report that either they or someone they know has personally experienced negative
outcomes due to alcohol, in particular, car crashes, domestic violence, and unemployment.
There is widespread support in Kenya for raising the tax on alcohol – even more so if the proceeds were used to fund social goods.
- 65% of Kenyans believe increases in taxes on alcohol products would be effective in reducing alcohol consumption.
- 86% said that their support for an alcohol tax would increase if the funds were used for education.
- 85% said that their support for an alcohol tax would increase if the funds were used for health care.
- 82% said that their support for a tax would increase if the funds were used for housing and to support the poor.
- 79% said that their support for a tax would increase if the funds were used for alcohol treatment and support services.
This compelling data shows that a re-orientation of the Ruto government based on experience and evidence towards the public interest instead of Big Alcohol’s private profit greed would also bring the Ruto government in line with Kenyans’ support for addressing alcohol harm as public health priority and raising alcohol taxes.