Market News

Industry seeks more time on excise stamps on beverages, other products

phyllis wakiaga

Phyllis Wakiaga, chief executive , Kenya Association of Manufacturers. PHOTO | SALATON NJAU | NMG

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Summary

  • KRA will from next week require industries to affix new-generation excise stamps on products
  • KRA targets an additional Sh3.6b annually from the tax following introduction of the stamps.
  • Manufacturers of food and beverages are affected by the directive.

Manufacturers have asked for more time to effect the Excisable Goods Management System (EGMS) stamps on products including bottled water as required by the law starting next week.

READ: Water, soda excise stamps from Nov 1

The taxman will, from Wednesday (November 1), require industries to affix new-generation excise stamps on water, juices, soda, energy drinks, other non-alcoholic beverages, food supplements and cosmetics.

The Kenya Revenue Authority (KRA) targets an additional Sh3.6 billion annually from the tax following introduction of the stamps.

“There have been regular meetings. The matters raised have been on issues such as extra administration resources needed to implement the system; that some already installed machinery in factories which is not compatible with the system and therefore more time is needed for compatibility,” said Kenya Association of Manufacturers (KAM) chief executive Phyllis Wakiaga in an interview.

Manufacturers of food and beverages are affected by the directive.

READ: Taxman’s bid to boost revenue gets IMF support

Extension plea

“Surveys are still being analysed as to the period most members deem appropriate,” the KAM boss said of the extension plea.

The KRA introduced the use of stamps under its EGMS, which kicked off three years ago, as part of a wider scheme to combat illicit trade, seal revenue leakages and boost collection.

“In order to ensure compliance, licensed manufacturers and registered importers of the affected products are advised to facilitate KRA’s technical teams to access the production lines for purposes of determining installation requirements,” KRA Commissioner for Domestic Taxes Benson Korongo said early this month.

Other excisable products, including beer, opaque beer, potable spirits and wines, ethyl alcohol, tobacco and tobacco products are already covered.