Lobby alleges spirit tax theft

June 8, 2009

, NAIROBI, Kenya, June 8 – The Government allegedly loses Sh9 billion annually due to sale of wines and spirits without remittance of excise duty, an industry lobby group said on Monday.

Chairman of the National Alcohol Beverages Association of Kenya (NABAK) Gerald Masila said in a statement that they had evidence of brands that were retailing in the country with questionable excise stamps.

Excise stamps were introduced in January 2007 by the Kenya Revenue Authority (KRA) to check against the sale of the beverages without the payment of the tax.

“There is a growing concern among our members due to the increased production and sale of wines and spirits in the Kenyan market which do not seem to bear the genuine excise stamps issued by KRA,’’  said Mr Masila.

He noted that if the problem remained unchecked, both the industry and the government would continue to suffer significant loses as Kenyans suffer health problems related to the drinks.

However, KRA Senior Deputy Commissioner Kennedy Onyonyi said he could not confirm the alleged amount of losses as a result of the fake stamps.

“NABAK has to come to us with this information and based on the procedure they have used to compute these figures, we can clarify whether they are right or wrong,” Mr Onyonyi said.    

NABAK is calling for more action from the government to clamp down on the manufacturers, distributors, and retailers of the products whose quality cannot be ascertained.

“Besides contributing over Sh25 billion as overall tax to the exchequer annually, the formal alcohol beverages industry in Kenya has both economic and social benefits since the industry supports more than 500,000 people directly with an estimate of around one million dependants,” observed the NABAK Chairman.

He noted that it is likely that products without the genuine excise stamps affixed to them have the Kenya Bureau of Standards (KEBS) diamond mark of quality.

However KEBS Managing Director Engineer Kioko Mangeli told Capital Business that the testing body was fully capable of detecting any substandard alcoholic beverages in the market.

“Anybody coming to us for the stamp has to produce their PIN number, VAT certificate and all documents necessary to transact government business. We then take a trip to the business premise to inspect the manufacturing procedure,” Mr Mangeli said

“Let any one who has evidence bring it to us since systems are traceable to a source,” he said.

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