Bottled water, juices, energy drinks, soda and other non-a*******c beverages will become more expensive after the rollout of a new system by KRA.
Starting on Wednesday this week, the Kenya Revenue Authority (KRA) will rollout the Excisable Goods Management System (EGMS) to enhance compliance and boost revenue collection.
KRA Commissioner for Domestic Taxes, Elizabeth Meyo said that the implementation of the system will increase revenue collection by approximately Ksh4 billion.
Fair competition among traders
Additionally, the system will also enable fair competition amongst traders in the sector.
“Currently we have up to 78% of companies in the water sector who are not paying their fair share of taxes. This is not fair to the 22% who are compliant. The system will, therefore, enable KRA to monitor and ensure that all traders within the sector are compliant,” said Meyo.
She added that to make the implementation of the system smooth, KRA has deployed more than 80 trained officers around the country.
The Authority is also facilitating the players in the sector with the installation of the system.
About 450 companies will be affected by the rollout. 64 production lines are automated while the rest are manual.
The rollout of EGMS on the automated line will be concluded before the go-live date.
Obtaining Excise Stamps
Already, 57 out of the 64 lines have been installed with an alternative secure system provided for manual lines.
Only licensed manufacturers and licensed importers of Excisable goods in accordance with 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 the predatory increase of prices.
The Authority has undertaken extensive engagements with manufacturers, importers and all the concerned stakeholders in the water industry.
These include 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 Ksh 1.5 to Ksh 0.5 per stamp for bottled water and Ksh 1.50 to Ksh 0.6 per stamp for soda, juice and other non-a*******c beverages.
Alcohol and cigarettes
EGMS was first rolled out in 2013 on alcohol and cigarettes. Since then the system has enabled KRA to raise Ksh 5.6 billion monthly.
EGMS has also contributed immensely in the fight against illicit trade and levelled 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 put in place various mechanisms, key among them being the automation of processes to enhance efficiency.
For this rollout, products manufactured or imported into Kenya prior to the go-live date will be allowed in the market up to 31 January 2020.
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