KRA defers stamp tax on soft drinks

KRA commissioner general John Njiraini.
KRA commissioner general John Njiraini. FILE PHOTO | NMG 

The Kenya Revenue Authority (KRA) has yielded to pressure to defer its plan to collect Sh3.6 billion in the excise tax on cosmetics, bottled water and other non-alcoholic drinks.

The KRA in a statement said it had arrived at the decision following consultations with stakeholders including Water Bottlers Association on Kenya. The duty was to become effective from Wednesday.

“KRA would like to inform manufacturers and importers of water and juice that it has deferred the implementation of Excisable Goods Management System on bottled water and juice to a date to be announced later,” it said in a joint statement with the lobby.

The change of mind came just hours after the parliamentary Public Investments Committee (PIC) warned that commissioner general John Njiraini would be held personally responsible if the taxman effects the Sh17 billion e-tax stamp project.

Mvita MP Abdulswamad Nassir said Parliament had written to the KRA warning it against implementing the system from today (Wednesday) until investigations into the procurement of a Swiss firm, SICPA Securities Solutions SA are concluded.

“We wrote to the KRA on Friday drawing their attention to the ruling of the Speaker and the decision of the committee to stop implementation of Excisable Goods Management System that is subject to our investigations. “We have notified them of the provisions of Article 96 of the Constitution that stipulates that no person or body has the power to implement a thing that has the force of law except Parliament,” Mr Nassir said during a meeting of the committee on Tuesday.

He said the committee’s attention had been drawn to a full-page paid up advertisement suggesting that the taxman would roll out the system despite House warnings.

“If people (Mr Njiraini) decide to break the law, we will hold them responsible. Disregarding House directives have attendant consequences. Article 227 is clear that any public officer who occasions the loss of public funds will make good the law,” said Mr Nassir in reaction to the KRA public advertisement.

He said the Sh1.50 per stamp tax is not going to the national kitty at the KRA but to pay SICPA for the system.

Mr Nassir said National Assembly Speaker Justin Muturi had raised several weighty issues on the tender for the system including the failure by taxman to table regulations on the system for House approval.