14 March 2014

Kenya: KRA Targets Beer, Water With New Excise Stamps

Nairobi — The Kenya Revenue Authority (KRA) is set to roll out the usage of new generation excise stamps for beer and bottled beverages that include soda and water.

KRA Commissioner General John Njiraini says this is aimed at ridding the market of sub-standard goods and curb tax evasion.

Njiraini says given the remarkable achievement made with the introduction of the new excise stamps in the tobacco, wines and spirits sectors, KRA will commence preparations to roll out similar requirements for beer and bottled beverages.

"We started with tobacco and wines and spirits industries, which have posed greatest tax compliance challenge within the excisable goods sector and hence initial focus on them," he said.

He says that since the rollout of its new system in December 2013, they have impounded over 100,000 pieces of wines and spirits products from over 400 outlets with the culprits paying fines as high as Sh1.5 million each.

The taxman plans to recruit 50 more enforcement officers in order to reach 100 staff by July 2014.

KRA also plans to provide consumers with sensors that will allow them to self authenticate the products they buy.

"The initiative which will initially focus on the large consumers that includes supermarkets and hotel chains will substantially extend their enforcement reach and thus erode the market for counterfeit products," he said.

The authority plans to use cellphones to provide similar stamp scanning capacity in order to empower more and more consumers.

Njiraini was speaking at the excisable stakeholders' forum on excisable goods management with among the stakeholders including Nakumatt Holdings Regional Director, Thiagarajan Ramamurthy, East African Breweries Managing Director Joe Muganda, British American Tobacco East and Central Africa Illicit Trade Manager Juma Mwashuruti among others.

On his part Muganda said about 30 percent of alcoholic products are illicit and urged KRA to move in fast and save the situation.

"You can imagine how much revenue this could be for the authority if they were legal, "he said.

KRA is set to monitor all excisable products through a new system dubbed the Excisable Goods Management System (EGMS) in order to increase revenue and improve efficiency.

The authority hopes to increase revenue by 20 percent in the current financial year if the system is effective.

The system provides for online ordering and approval for delivery with the details of the stamp captured in the system at the time of printing and are tracked along the supply chain right from the printing facility in Switzerland to delivery to the manufacturers.

Currently, the products under the EGMS regime are tobacco products, wines and spirits beverages.

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