Government Faulted Over Taxes on Bottled Water Refills

By John Kariuki

Bottled water and specifically portable water (refills) should not be charged excise tax. The government should instead offer rebates to such companies in a bid to spur economic growth.

This is the advisory of leofresh director Mr Samuel Muraya who termed water as a basic human need and instead called for support by the government of his excellency Dr William Ruto who pledged to support local producers.

There are two key players in the water industry; bottlers and re-fillers. The biggest bone of contention has been with the latter category which specialises in refilling water using automatic water dispensers also known as ‘water ATMs’ on whether to charge excise duty or not. According to the law, they are also obligated to charge excise duty.

Following the recent tax amendments through the Finance Act 2020, all persons in the business of bottling (including through refilling) or packaging water are required to obtain an excise license from KRA as a prerequisite for charging and remitting excise duty.

Excise License

They are also required to affix excise stamps on each bottle that has been refilled or packaged. It is important to note that it is an offence to manufacture excisable goods without an excise license.

It is also an offense to purchase, sell or be in possession of excisable goods that have been manufactured by unlicensed persons. Products from unlicensed manufacturers will either have counterfeit stamps or will not be affixed with any stamps at all.