The Kenya Revenue Authority (KRA) has officially announced the removal of excise duty on bottled water. An attendant is seen refilling the water bottle at the refill station in Nakuru town. KRA has removed excise duty on bottled water. Photo: James Wakibia/SOPA Images. Source: Getty Images Do bottled water vendors pay excise duty? The changes are set to take effect from July 1, 2026, following key amendments enacted through the Finance Act, 2026, which revise the First Schedule of the Excise Duty Act (Cap 472). In a public notice issued by the Commissioner for Micro & Small Taxpayers, the KRA confirmed that bottled water manufactured or imported on or after the effective date will be exempt from excise duty. “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 be required to be affixed with excise stamps.”
Consequently, these products will no longer be required to bear excise stamps, a significant shift in compliance requirements for producers and importers. The policy change is expected to have a notable impact on the bottled water industry. By eliminating the excise tax, manufacturers and importers may see a reduction in production costs, which could potentially lead to lower consumer prices and stimulate demand. The removal of the excise stamp requirement also simplifies the supply chain by reducing administrative hurdles related to stamp procurement and affixing. While the new tax regime begins on July 1, 2026, the KRA has reminded stakeholders of their ongoing obligations. Manufacturers and importers are still required to file their Excise Duty Returns for June 2026 and settle any outstanding taxes by the statutory deadline of July 20, 2026. Adan Mohammed is the Kenya Revenue Authority commissioner general. Photo: KRA. Source: Facebook “Manufacturers are reminded of their obligation to submit their Excise Duty Returns for June 2026 and pay the taxes due by 20th July, 2026.” To facilitate the transition, the tax authority has stated that the Commissioner will issue detailed guidelines concerning the return of unutilised physical stamps and the decommissioning of digital stamps.
These guidelines are expected to be published on the official KRA website in due course. “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 KRA is encouraging affected parties to reach out to its Enforcement Division for any clarification regarding the new directives. This announcement represents a significant policy shift aimed at easing the tax burden on the beverage sector and streamlining excise duty administration in Kenya. How Kenyans reacted to excise duty removal The announcement sparked conversations among Kenyans on social media platforms, with many users questioning KRA’s intent. “Whose business is this you guys are exempting from taxes? Wacheni kutubeba kaa kofia. Or else we hold on paying taxes,” Harold asked. Francis Kabue: “Just let us know who the new venturers in the business are.” Alex Mwangi: “Inakaa zakayo ameanza biashara ya maji” Nitrixsystems: “In a country where plastic bags are illegal, this is a strange rule… reeks of backroom campaigns.”
