MPs want the Auditor General to conduct a forensic audit into the multibillion-shilling tender that the taxman awarded a Swiss multinational security printer, Sicpa, for the supply of excise duty stamps.
The National Assembly’s Public Investments Committee on Commercial and Energy Affairs wants Auditor-General Nancy Gathungu to conduct a special audit into the five-year contract for the provision of excisable stamps on a range of consumer products, including soda, bottled water, fresh juices, beer, spirits, cosmetics and cigarettes.
The excise stamp contract is a multi-billion-shilling deal, involving the printing of stamps and the provision of track and trace technology to detect fake stamps.
“We have tentatively agreed that the Auditor-General conducts a forensic audit on the excise stamps deal that the Kenya Revenue Authority (KRA) has entered into with the Swiss printer,” David Pkosing, who chairs the committee said.
“We will have to summon the KRA here and audit them on the sale of excise duty stamps as well as the procurement of the Excisable Goods Management System (EGMS).”
Mr Pkosing made the decision ahead of the KRA management appearance before the team on Tuesday to respond to key audit issues that have been tabled in Parliament.
The Excise Duty (Excisable Goods Management System) (Amendment) Regulations, 2023 proposes to raise the stamp fees for cosmetics from 60 cents per stamp to Sh2.50 — a margin of 317 percent — while the stamp fee for fruit juices and non-alcoholic beverages such as sodas will go up by 267 percent to Sh2.20 from 60 cents.
The cost of a stamp affixed on a beer bottle will double to Sh3 from Sh1.50, while those for spirits, wines and tobacco products are set for a 79 percent rise to Sh5 from the current Sh2.80 per stamp.
The Kenya Association of Manufacturers (KAM) has warned that the proposed increases were bound to increase their costs and precipitate spiralling increases in consumer prices of the affected commodities.
The excise stamps are meant to deter counterfeiting and enable tracking of excisable goods along the supply chain, which helps the taxman compute the excise due from manufacturers and importers.
In the year ending June 2022, the KRA collected Sh256.3 billion in excise taxes, equivalent to 13 percent of the KRA’s total revenue collection of Sh2.03 trillion.
The Treasury in the Supplementary Budget for the year to June 2023 has allocated KRA Sh2 billion from the taxman as part of a settlement of pending bills for the supply of excise duty stamps.
