Kenya Revenue Authority (KRA) is keen on implementing the Excise Goods Management System (EGSM) on bottled water, juices, energy drinks and soda so as to capture the 78 percent of manufacturers who are not paying taxes.
Kenya Revenue Authority informed all licensed manufacturers, importers, distributors, retailers and general public that further to the Public Notice dated 30th August 2019, bottled water, juices, energy drinks, soda and other non-alcoholic beverages manufactured in or imported into Kenya from 13th November, 2019 must be affixed with an Excise Stamp in accordance with Section 28 of Excise Duty Act 2015 and Legal Notice 53 of 30th March, 2017 (Excisable Goods Management System Regulations).
Speaking during a press briefing in Nairobi Friday, the KRA Domestic Taxes Commissioner Elizabeth Meyo, said that the excise stamps will help enhance tax compliance, reduce illicit trade and will increase the revenue by approximately Sh4 billion.
“For us to come up with a roll out date we have engaged the stake holders, we have conducted sensitization programmes, we have gone round the country and have addressed the issues raised by the manufacturers,” said Meyo.
She added that the stamps will help monitor how business is being done and ensure everyone is paying their fair share of taxes and create a level playing ground for the stakeholders in the field.
“Our team comprising of 80 trained officers are on the ground helping tax payers to comply in paying taxes. They will be going round in supermarkets and shops to ensure that the exercise is undertaken,” she said.
Meyo further said that they have gone through an assessment meeting to check their readiness and all systems are set for the roll-out.
“The main reason why we feel we should have fairness in the field, especially in the water sector is because 78 percent of the manufacturers in the field are not paying taxes leaving only 22 percent to pay the taxes which he noted is not fair,” lamented Meyo.
She said that the only way to standardize the industry is by coming up with an approach that will enable KRA monitor everybody dealing in these products.
Meyo stated that the stamp will cost Sh50cents for water and Sh60cents for the non-alcoholic beverages and the product prices will not rise for more than Sh6.
“The officers will ensure that the manufacturers will not hike the prices of the products owing to the introduction of the excise stamps,” she noted.
She confirmed that the process of stamp installation is 90 percent done since they have 64 automated companies to install on and out of which they have already installed 54 companies.
Meiyo further said that the 64 companies are not the only one since there are over 400 companies dealing in the products but do not have automated lines and KRA will help them companies manually fix the stamps.
“Moving forward, we are anticipating to have one stamp for agencies that will be recognized by the Ministry of Health, Kenya Bureau of Standard (KEBS) and KRA so as to ease the cost of doing business in Kenya,” she added.
By Njeri Kariuki