KRA starts enforcing excise stamps on goods today
Kenya Revenue Authority (KRA) will from today start rolling out the Excisable Goods Management System (EGMS) on bottled water, juices, energy drinks, soda, and other non-alcoholic beverage food supplements and cosmetics.
KRA announced yesterday that the products must be affixed with excise duty stamps when the EGMS goes live.
Excise stamps are fixed to excisable goods to indicate that the required excise tax has been paid by the manufacturer before sale.
KRA commissioner for domestic taxes Elizabeth Meyo said in a statement that the implementation of the system will boost revenue collection by approximately Sh4 billion.
“Seventy-eight per cent of companies in the water sector are not paying the required share of taxes. This is not fair to the 22 per cent of companies that are compliant. The system will enable KRA to monitor and ensure that all traders within the sector are compliant,” she said.
Meyo said KRA had deployed more than 80 trained officers to enable smooth implementation of the system around the country. The authority is also facilitating players in the sector to install the system.
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.
Francis Kamau, a tax partner at audit and consultancy firm EY East Africa said while the cost of bottled water, juices, energy drinks, soda and non-alcoholic beverages will go up, some manufacturers and importers of the items have not been paying despite KRA imposing it on other items such as wines.