Kenya has introduced the Excise Duty (Remission of Excise Duty) Regulations, 2026, effective 1 April 2026. The regulations mark a major shift in the country’s excise remission framework.
The new rules expand remission beyond beer to include spirits and wine. They also introduce clearer eligibility criteria, stronger compliance obligations and enhanced traceability requirements.
For businesses across the alcoholic beverages value chain, the framework creates both opportunity and responsibility. Manufacturers that meet the prescribed conditions may continue to benefit from remission, but they will need to align sourcing, production, packaging, pricing and reporting with the updated rules.
What has changed
The 2026 Regulations move Kenya’s remission regime from a beer focused model to a more structured and expanded framework. The comparison below summarises the main differences between the 2017 and 2026 Regulations.
Main comparative features: 2017 vs 2026 Regulations
| Feature | 2017 Regulations | 2026 Regulations | Key takeaway |
|---|---|---|---|
| Scope of products | Beer only | Beer, spirits and wine | Broadens remission beyond beer |
| Key definitions | Not defined | Defines distiller and compounder | Introduces clearer role definitions |
| Remission rate | 80% | 80% | The 80% remission level is unchanged |
| Eligible spirits | Not applicable | Distilled spirits (above 90% ABV) | Opens remission to high strength spirits only |
| Compounder eligibility | Not applicable | Limited to licensed distillers compounding their own spirits, subject to local input, labelling, packaging and pricing conditions | Compounders face tight product, sourcing and pricing limits |
| Product exclusions | Beer made from barley | Products made from sugarcane and barley; spirits at or below 90% ABV; export, refund, rebate or drawback spirit products; spirits for non alcoholic beverage use | Several product categories remain outside scope |
| Local input requirements | At least 75% locally sourced agricultural inputs (excluding sugar and barley) | At least 75% locally sourced agricultural inputs (excluding sugarcane and barley) | Local sourcing remains a core condition |
| Packaging requirements | Beer: at least 30 litres | Beer: at least 30 litres; Spirits: at least 250 millilitres; Wine: at least 1 litre | Minimum pack sizes now vary by product type |
| Pricing conditions | Beer: maximum KES 100 per litre | Beer: maximum KES 150 per litre; Spirits: maximum KES 350 per litre; Wine: maximum KES 750 per litre | Each product category has a pricing cap |
| Compliance requirements | Tax compliance; valid excise licence; EGMS; KEBS compliance | Tax compliance; eTIMS or TIMS; valid excise licence; EGMS; flow meter; remission labelling | Stronger tax, licensing and systems controls apply |
| Return | Monthly | Quarterly (including flow meter data) | Reporting becomes quarterly |
| Traceability requirements | Not explicit | Farmer and local sourcing traceability required | Source verification is now explicit |
| Non compliance | Recovery of remission and penalties | Revocation of remission and full duty plus penalties | Penalties are stricter under the new rules |
| Transition provisions | Not applicable | 6 month transition from 1 April 2026 | Existing beneficiaries get time to adapt |
Why it matters
The new framework is designed to support local value addition while strengthening oversight across the supply chain. It also raises the bar for compliance.
Businesses will need to demonstrate that their operations meet the conditions for remission, especially on local input sourcing, product classification, traceability and reporting.
For manufacturers, distributors and other stakeholders in the sector, this is an important moment to review whether current systems and controls are fit for purpose under the new regime.
Key considerations for businesses
Local input requirements: the Regulations prescribe the use of qualifying locally sourced agricultural inputs, excluding specified inputs such as sugarcane and barley, to determine eligibility for remission.
Compliance requirements: the framework introduces additional compliance measures, including EGMS integration, flow meter installation and expanded reporting obligations.
Systems and traceability: the Regulations require farmer traceability and verification of local sourcing, alongside enhanced monitoring and reporting.
Structure of eligibility for spirits: remission for spirits is defined by reference to ENA exceeding 90% ABV and is primarily applicable to licensed distillers, including cases where a distiller compounds its own product under prescribed conditions.
Commercial conditions: eligibility is subject to packaging, pricing and local content thresholds, which form part of the prescribed criteria for remission.
What this means for your business
The 2026 Regulations create an opportunity for eligible businesses to benefit from remission under a wider framework. At the same time, they require a more disciplined approach to compliance, documentation and operational control.
Businesses should act early to assess whether their products qualify, whether sourcing structures meet the new thresholds, whether systems support reporting and traceability requirements, and whether pricing and packaging models align with the new rules.
Early preparation will help businesses protect available remission benefits, reduce exposure to excise duty and adapt smoothly to the new framework.
How OGP Advisory can help
OGP Advisory supports businesses in reviewing eligibility, strengthening compliance frameworks and aligning operations with regulatory changes. The firm helps clients assess the impact of the new excise duty remission rules and prepare for implementation.
Contact OGP Advisory to review eligibility and compliance readiness under the new Excise Duty Remission Regulations.