The Kenya Revenue Authority (KRA) has done away with excise duty on bottled water, in a move that offers relief to manufacturers, importers and consumers across Kenya. The changes took effect on July 1, 2026, and apply to all licensed manufacturers and importers of bottled water, with bottled water manufactured or imported from that date no longer attracting excise duty or requiring excise stamps to be affixed.
The change stems from amendments contained in the Finance Act, 2026, which revised the First Schedule to the Excise Duty Act, Cap 472, removing bottled water from the list of excisable goods. Before the amendment, bottled water manufacturers paid 50 cents per excise stamp, while water dispensed through vending machines, or water ATMs, was taxed at Sh5.74 per litre.
The reform also does away with the requirement for excise stamping. This brings to an end the use of both physical and digital stamps under KRA’s Excise Goods Management System (EGMS) for this category of products. KRA has said it will issue further guidance on how manufacturers should handle stamps already purchased but not yet used, and how digital stamps in circulation will be decommissioned, with these details to be published on its official website.
Even with the exemption now in force, the taxman has clarified that obligations from before the changeover remain in place. Manufacturers have been directed to file their June 2026 excise duty returns and settle any outstanding dues by July 20, 2026. KRA also noted that manufacturers must continue to comply with other applicable taxes, including the standard 16 percent VAT and the 10 percent excise duty on plastic packaging introduced under the same Finance Act.
The move is part of a broader set of tax adjustments under the Finance Act, 2026, aimed at easing compliance costs for businesses while encouraging price reductions for consumers in the bottled water market.
