Fears sale of illicit booze could go up over new taxes

Bar owners in Nairobi have warned that the sale of illicit brews could go up due to an increase in license fees for running alcohol businesses.

They want the government to clarify the new license charges to enable them to plan.

Their concerns come after Nairobi Governor Johnson Sakaja assented to the Nairobi County Finance Act 2023 which had various proposals, including the new license charges for bars.

In the new law, general retail alcoholic drinks will pay annual fees of Sh100,000 up from Sh25,000. Retail alcohol drinks shops, also known as Off License, will pay Sh50,000 up from the Sh12,000 they used to pay for an annual license.

Some bar owners said the new fees are too high. They are concerned they do not specify how different sizes of businesses are expected to pay.

They argue that the government should specify the exact charges that traders who run small bars in estates will be expected to pay.

Bar, Hotels and Liquor Traders Association (Bhalita) officials said their input during public participation forums was not factored into the law before it was passed.

"It is sad that we don't take public participation seriously. In our case, there was no discussion on increasing license fees. We are frustrated,” said Mr Boniface Gachoka, the Bhalita Secretary General.

He added: “Our businesses are legally registered. The increased taxes are already pushing small-scale liquor traders out of business. We will challenge the decision in court.”

"Increasing license fees could lead to the rise in consumption of illicit brews as prices of genuine brands will go up," Gachoka said.

The Pubs, Entertainment and Restaurant Association of Kenya has already written to the county seeking further clarification on the new law.