In an already soaring economic environment, the so soon effected directive to increase excise duty on alcohol is projected to reduce government revenue.

On March 22^nd 2010, National Campaign against Drug Abuse (Nacada) acceded to legalizing chang’aa so that its production can be regulated. On July 22^nd the same year, Sam Ikwaye, the Executive Officer of the Pubs and Restaurants Association of Kenya (PERAK) was reported saying that “the proposed laws(Alcoholic Drinks Control Act) will do to the alcohol industry what the “Michuki Rules” did to the public transport sector.” However, we should note that the cause/effect of either vary significantly. Ideologically, the new alcohol law is designed to limit drinking hours in an effort to allow for more time to be spent on productive activities. In a society characterized with high unemployment, and rising cost of living, compounded by increased taxation on alcoholic drinks, it will be difficult to implement the Alcoholic Drinks Control Act because, frequent alcohol consumers who can now not afford the bottle would compulsively opt for cheaper nonstandard alcoholic drinks, which are still highly unregulated, thus reduced revenue collection from licensed alcohol. “Increase of excise duty on alcohol is ‘counter productive’ and likely to reduce government revenue from the industry which is one of the major contributors”, said Consultancy firm Deloitte and Touche Kenya.

Instead of aggressively enforcing regulation of the alcohol industry by strict adherence to directives by the district liquor licensing boards, the government should consider a more overt system to address the issue of alcohol abuse by establishing adequate and affordable rehabilitation facilities and advocate for aggressive civil education on the economic, social, and psychological effects of alcohol abuse. Do not bite the hand that feeds you, and two wrongs never make a right.

References:

High Alcohol Tax Likely to Affect Revenue-Analyst allAfrica.com June 10, 2011

License Chang’aa, Nacada tells State Daily Nation March 22, 2010

New alcohol law hard to effect, say players Daily Nation July 22, 2010