Beer makers face costly recalls from distributors if they fail to clear stocks without excise stamps ahead of a March 31 deadline by the taxman.
A directive by the Kenya Revenue Authority’s (KRA) Commissioner for Domestic Taxes Alice Owuor requires beers to have mandatory excise stamps affixed on bottles starting February 1 as part of measures to seal revenue leaks.
The directive applies to both local and imported beers. Those already holding stocks of beer without excise stamps have until March 31 to clear them or risk penalties.
“After the March 31, 2016 deadline, distributors and retailers shall declare and handover of all beer products bearing no stamps or codes to the respective manufacturers or importers for affixation of excise stamps or codes,” KRA said in a notice to traders.
Excise tax is payable on production or supply of a service and to domestic output or imported products.
The tax is paid by the manufacturer or service provider but is borne by the end consumer as part of the cost of the excisable product or service.
The law bars manufacturers or retail chains from releasing products into the market without an excise licence.
Excisable products include beer, opaque beer, potable spirits and wines, ethyl alcohol, tobacco and tobacco products, polythene bags, juices and other non-alcoholic beverages, soft drinks (sodas), cosmetics and bottled water.
Under Section 116 (B) (3) of the Customs and Excise Act, no person shall import, distribute, offer for sale or be in possession of any excisable goods without the authority of the Commissioner.
Any person who contravenes the above sections shall be liable to a fine and the subject goods shall be seized and destroyed at the offenders’ cost.