KRA puts off roll-out of excise duty system after talks with bottlers

July 31, 2018
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NAIROBI, Kenya, Jul 31 – Kenya Revenue Authority (KRA) has deferred the implementation of Excisable Goods Management System (EGMS) on bottled water and juice that was to commence on 1st August 2018 to a date to be announced later.

The Authority says the move follows extensive consultations with various stakeholders including Water Bottlers Association on Kenya (WBAK).

“KRA will communicate the new implementation date after concluding the activities jointly agreed with the stakeholders,” the Authority said.

The government had on October 3, 2017, given a public notice announcing that with immediate effect from November 1, 2017, bottled water, juices, soda and other non-alcoholic beverages and cosmetics manufactured or imported into Kenya would be affixed with excise stamps.

KRA argued charging excise duty on the mentioned goods would generate Sh 3.6 billion additional revenue annually.

KRA has been implementing new excise duty stamps through the Excise Goods Management System (EGMS) for beer, mineral water, juices and soft drinks.

The new EGMS system is designed such that details of each excise stamp appended on a product at the point of manufacturing are captured by the system at the time of printing and then tracked along the supply chain right from the production facility.

Meanwhile, Coast Bottled Water Manufacturers Association had called for a review of the introduction of the new tax regime.

The tax changes are contained in the new Finance Act, in which, water manufacturers will be forced to pay Sh0.2 on Excisable Goods Management System duty and additional Sh0.5 Stamp Duty.

Michael Otieno, the chairperson of the Coast Bottled Water Manufacturers Association, said these additional taxes will mean an increase on the operational cost.

“An increase in our operational cost will mean an increase in the price of the bottled water. Therefore, it is the consumer who is going to suffer,” said Otieno.

He says Kenyans will be forced to buy the bottled water at a higher price moving forward.

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