The Kenya Revenue Authority (KRA) has announced the removal of excise duty on bottled water following the enactment of the Finance Act, 2026, in a move expected to lower the tax burden on manufacturers and importers.
In a public notice issued on Monday, July 6, 2026, KRA said the tax change took effect on July 1, 2026, after amendments to the First Schedule of the Excise Duty Act under the Finance Act, 2026.
The authority said all bottled water manufactured or imported from the effective date will no longer attract excise duty and will not be required to bear excise stamps.
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“KRA notifies all licensed manufacturers and importers of bottled water and the general public that pursuant to the Finance Act, 2026, excise duty on bottled water is removed with effect from 1st July, 2026,” the notice reads.
Guidelines from the agency
The tax agency further announced that the Commissioner will issue detailed guidelines on the return of unused excise stamps and the decommissioning of digital stamps. The guidelines will be published on the KRA website.
Despite the removal of the tax, KRA reminded manufacturers that they are still required to file their Excise Duty Returns for June 2026 and settle all taxes due by July 20, 2026.
“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,” KRA said.
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The removal of excise duty is expected to ease compliance requirements for bottled water producers by eliminating the need for excise stamps on products manufactured or imported from July 1 onwards.
It may also reduce production costs, although it remains to be seen whether the savings will be passed on to consumers through lower retail prices.
KRA’s 6-month tax amnesty for defaulting taxpayers
The notice comes days after Treasury Cabinet Secretary John Mbadi announced a six-month tax amnesty for taxpayers with outstanding tax arrears, allowing them to clear their principal tax without paying accumulated penalties and interest.
Mbadi said the measure is intended to give taxpayers who have struggled to meet their tax obligations an opportunity to regularise their tax affairs.
He noted that many Kenyans have been unable to pay their taxes on time due to various challenges, resulting in the accumulation of penalties and interest over the years.
“For various reasons, there are some Kenyans, taxpayers, who have not been able to pay their taxes on time. And so, they have been penalised, interests have been charged, and penalties have been levied,” Mbadi said.
