Good News for Kenyans as KRA Scraps Excise Duty on Bottled Water

The Kenya Revenue Authority (KRA) has announced the removal of excise duty on bottled water manufactured or imported into Kenya, effective July 1, 2026.

In a notice issued on July 6, KRA said the change follows the enactment of the Finance Act, 2026, which amended the First Schedule to the Excise Duty Act, Cap 472.

The authority added that licensed manufacturers and importers of bottled water will no longer be required to affix excise stamps to products manufactured or imported from July 1 onwards.

“Kenya Revenue Authority notifies all licensed manufacturers and importers of bottled water and the general public that pursuant to the Finance Act, 2026 (amending the First Schedule to the Excise Duty Act, Cap 472), excise duty on bottled water is removed with effect from 1st July, 2026. Bottled water manufactured or imported on or after this date will not be subject to excise duty and will not require to be affixed with excise stamps,” KRA stated.

KRA Announces Bottled Water No Longer Subject to Excise Duty

KRA further stated that the Commissioner will issue detailed guidelines on the return of unused excise stamps and the decommissioning of digital stamps and publish them on its official website once they are finalized.

“The Commissioner will issue detailed guidelines on the return of unutilized stamps and the decommissioning of digital stamps, which will be published on the official KRA website,” the authority stated.

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Despite the removal of excise duty on bottled water, the authority reminded manufacturers that they are still required to file their Excise Duty Returns for June 2026 and that all taxes due for the month of June must be paid on or before July 20, 2026.

Additionally, KRA urged affected manufacturers and importers to comply with the filing deadline to avoid penalties associated with late submission or payment.

“Manufacturers are reminded of their obligation to submit their Excise Duty Returns for the month of June 2026 and pay the taxes due by 20th July, 2026,” read part of the statement.

The authority also advised taxpayers to monitor its official communication channels for further guidance on the implementation of the new excise duty changes, including procedures for returning unused stamps and decommissioning digital excise stamps.

Mbadi Urges Bottled Water Traders to Cut Prices

This development comes shortly after Treasury Cabinet Secretary John Mbadi urged bottled water manufacturers, distributors and retailers to reduce prices following the removal of excise duty on the product.

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Mbadi said the government scrapped the excise duty of Ksh6 per litre on bottled water, a move aimed at lowering the cost to consumers, adding that bottled water should be cheaper.

“The bottled water has been attracting excise duty. We removed that at a rate of six shillings per litre. That has now been removed, so bottled water should be cheaper from today,” Mbadi said.

In addition, the CS urged traders across the supply chain to pass on the tax savings instead of retaining the benefits, insisting that consumers should be the ultimate beneficiaries of the government’s decision.

Mbadi also dismissed claims that the government had introduced new taxes on bottled water, saying the changes had been misrepresented through misinformation and propaganda.

The CS said the tax relief is part of broader reforms intended to ease the cost of living by eliminating taxes on selected goods while ensuring that businesses transfer the benefits of lower taxation to consumers through reduced prices.

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KRA Announces Removal of Excise Duty on Bottled Water. Photo/ KRA