Increase in Excise Duty on Imported Sugar

What Changed?

The Finance Act, 2026 increased Excise Duty on imported sugar from KES 7.50 to KES 40 per kilogram.

The Excise Duty rate increased by KES 32.50 per kilogram, representing an increase of approximately 433%.

What Are the Implications?

• Higher import costs: Importers will pay significantly more Excise Duty on qualifying imported sugar.
• Increased manufacturing costs: Manufacturers that rely on imported sugar as a raw material may experience higher production costs.
• Potential price increases: Businesses may pass some of the additional costs to consumers, depending on market conditions.
• Support for local production: The higher duty is intended to encourage local sugar sourcing and support domestic sugar production.

What Should Businesses Do?

Businesses that import sugar or use it in manufacturing should review their costing, pricing and procurement strategies to account for the increased Excise Duty.