Water Bottlers Association of Kenya (WBAK) chairperson Henry Kabogo has accused the Kenya Revenue Authority (KRA) of pushing him out of business, by denying him excise stamps on flimsy grounds.
According to Kabogo, the taxman through its agents have been taking him in circles since August 2022, when he applied for new excise stamps.
Kabogo, in a statement says that he did not get an immediate response on his application. However, on following up, he was asked to pay some late filing penalties that were pending in the system.
“We entered into a plan to pay immediately. We cleared this in December 2022,” he says.
“Following up on December 13, 2022, we were issued with a variance analysis and additional assessments, which we recomputed and demonstrated that we had paid through the Itax system. Whatever didn’t match, we scheduled to settle on January and February 2023.As for the other assessment issued, we have objected through the system. Legally, this process should take a maximum of 90 days to close,” he adds.
All this while, Kabogo says that his case was being handled by Mr Felix Simiyu, the relationship officer who was assigned to facilitate his stamp approval. He says, instead of Mr Simiyu facilitating the stamp approval, he started claiming that the “boss” was not around hence he could not approve.
“When I followed up with a call, he would always reference that “boss” was not around, and as soon as he came, he would approve. Till now, the “boss,” Mr Lazarus Cheruiyot, has not seen the need to come to the office or facilitate me.Such an approval can be done through any browser, as used to happen during lockdowns. It is not a system access issue,” Kabogo states.
“KRA Busia will not receive excise duty tax for December and January 2023 since I have not been in operation. Like the president, I wondered why Kenya consumes fewer stamps than Uganda and Tanzania, which have much smaller economies, and this is one of the reasons why. There are people who don’t lose sales or customers because of this bureaucracy. They get fake stamps that are easily available. Let no one wonder why 80% of the market is controlled by illicit. EGMS’ approval should not take four months. Business continuity should not be at the mercy of a few irresponsible officers with no conscience for welfare or business. I hope the “boss” returns soon to allow my family to trade and make a living. It hurts to lose customers through such sabotage.”
The Excisable Goods Management System (EGMS) was introduced in 2019 aimed at easing tax collection on manufacturers of non-alcoholic drinks.
According to KRA, EGMS was designed to have minimum impact to the efficiency of manufacturers’ production lines, operating at speeds that are at least 2.5 times faster than the highest installed production speed in the country.
“I was one of the stakeholders who supported KRA in their endeavors to introduce the EGMS system, assisting over 500 companies to get licensed and even training some companies in using the EGMS system. My team would assist in cleaning the market of illicit and fake stamps. I am saddened by the deliberate mismanagement of the EGMS system by KRA staff responsible for approving the issuance of stamps at the various tax stations,” Kabogo adds.
“Whenever manufacturers need stamps for their plants to continue producing, tax assessment warnings are issued, most of which are not related to excise duty but other obligations. Therefore, many SMEs and MSMEs have been forced to halt operations, with some even closing the business altogether. EGMS promised a maximum turnaround time of 7 days from the period of application to the time you get issued with stamps. EGMS was sold to the government as an automated system that would not only ease trade but also make tax administration easy.”
According to KRA, EGMS has redundancies that allow production to continue in the case of lack of connectivity to KRA.
“The Authority provides round the clock technical support service framework to ensure limited interruptions,” the taxman said in 2019.
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