NAIROBI, Kenya, Nov 8 – KRA will from Wednesday next week roll out the Excisable Goods Management System (EGMS) on bottled water, juices, energy drinks, soda and other non-alcoholic beverages.
Speaking during a press conference in Nairobi, KRA Commissioner for Domestic Taxes, Elizabeth Meyo said that the implementation of the system will enhance compliance and boost revenue collection by approximately Sh4billion.
The system will also enable fair competition amongst traders in the sector.
“Currently we have up to 78 percent companies in the water sector who are not paying their fair share of taxes. This is not fair to the 22 percent who are compliant. The system will therefore enable KRA to monitor and ensure that all traders within the sector are compliant”. Said Commissioner Meyo.
Meyo also elaborated that KRA has deployed more than 80 trained officers to enable smooth implementation of the system around the country. The Authority is also facilitating the players in this sector with the installation of the system.
The rollout of EGMS in this sector will affect about 450 companies out of which 64 production lines are automated and the rest are manual.
The installation on the automated line will be concluded before the go-live date.
At the time of going to press, 57 out of the 64 lines had been installed. An alternative secure system is provided for manual lines. Only licensed manufacturers and licensed importers of Excisable goods in accordance to Section 15 of the Excise Duty Act 2015 will able to obtain Excise Stamps.
During the implementation period, KRA will work closely with other relevant agencies including Competition Authority who will ensure that consumers are protected from predatory increase of prices.
The Authority has undertaken extensive engagements with manufacturers, importers and all the concerned stakeholders in the water industry. This includes the Kenya Association of Manufacturers (KAM), and Water Bottlers Association of Kenya (WBAK), among others. KRA has also educated the stakeholders on the system and considered their views during the implementation. Key among the concerns was cost of the Excise Stamps which was reviewed from Sh1.5 to Sh0.5 per stamp for bottled water and Sh1.50 to Sh0.6 per stamp for soda, juice and other non-alcoholic beverages.
EGMS was first rolled out in 2013 on alcohol and cigarettes. Since then the system has enabled KRA to raise Sh5.6 billion monthly.
EGMS has also contributed immensely in the fight against illicit trade and leveled the playing ground for traders as well as protect consumers from substandard products. Through the system, KRA has seized illicit products worth millions of shillings and saved the country from losing revenue.
KRA has demonstrated its capacity to serve as a key pillar in supporting Kenya’s development agenda through effective revenue mobilization. To grow business value and facilitate trade, KRA has put in place various mechanisms, key among them being automation of processes to enhance efficiency.
Commissioner Meyo reaffirmed that KRA will continue to facilitate businesses in collaboration with other government agencies to ensure that they have a conducive business – operating environment during the roll out.
Products manufactured or imported into Kenya prior to the go live date will be allowed in the market up to 31 January 2020.