Fresh excise duty guidelines for manufacturers and importers: KRA announces

In a notice dated July 6 2026, issued to manufacturers and importers, the tax body confirmed that bottled water manufactured or imported on or after July 1, 2026, will no longer be subject to excise duty.

The changes, which take effect on July 1, 2026, introduce updated compliance requirements for manufacturers and importers, along with transitional measures affecting excise duty management systems.

The shift has been issued by Kenya Revenue Authority (KRA), following the new directives on excise duty that came about following the  changes introduced under the Finance Act, 2026.

Under the new directives, the excise duty on bottled water has been removed starting July 1, 2026.

This means manufacturers and importers dealing in bottled water will no longer be required to account for excise duty in their pricing, production reporting, or compliance systems for goods produced after the effective date. 

“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,” the notice read. 

Previously, bottled water producers were required to pay excise duty and affix KRA-issued excise stamps on each unit of product to verify tax compliance.

KRA also confirmed that bottled water will no longer be subject to excise stamping, bringing an end to the use of both physical and digital stamps under the EGMS system for this category of products.

The authority said detailed guidelines will be issued on how manufacturers should handle unutilized excise stamps already in circulation.

The authority further reminded manufacturers and importers that excise duty returns for June 2026 must be filed and paid by July 20, 2026, in line with statutory requirements.

“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. 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. 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,”added KRA.

Despite the removal of excise duty on bottled water, KRA clarified that all tax obligations incurred before July 1, 2026, remain enforceable.

“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,” read the notice.

This means bottled water produced or imported before the policy change will still be subject to excise duty under the previous framework.