Implementation of excise stamps on excisable goods to boost KRA’s earnings
Kenya Revenue Authority (KRA) will from Wednesday start piloting Excisable Goods Management System (EGMS) on bottled water, juices, energy drinks, soda, and other non-alcoholic beverage food supplements and cosmetics.
Excise stamps are fixed to excisable goods to indicate that the required excise tax has been paid by the manufacturer before the sale.
According to KRA, the phase two programme was reached upon after they held an extensive engagement with the stakeholders of the goods.
Implementation of the first phase of EGMS was conducted in 2013 which covered; wines, beers, spirits, and cigarettes. They were later offered an injunction letter by activist Okiyah Omtatah through a petition in the high court in March 2018 arguing that the public was not involved for the exercise.
The court ruled in favour of activist Omtatah, but the taxman later moved to the Court of Appeal and filed an application for stay of the High court judgement. The matter was agreed upon by the court of Appeal in May 2018, giving the taxman a leeway to carry on with the implementation of EGMS.
The exercise is expected to net more revenues for KRA from excisable goods and help fight counterfeit products in the country, at the same time deter smuggling of goods.
The rollout of EGMS in the water sector will affect about 450 companies out of which 64 production lines are automated and the rest are manual. The installation on the automated line will be concluded before the go-live date.
This will provide a level playing ground for all local manufacturers and importers of goods to ensure they all contribute equally to tax.
The requirement to affix stamps on excisable goods is underpinned under the excise duty Act 2015.