Manufacturers protest excise stamp demand

Money Markets

Juice, soft drinks and bottled water will now bear an excise stamp from the Kenya Revenue Authority. PHOTO | FILE  

By JOHN GACHIRI

In Summary

• The excise stamps are meant to have the twin effect of increasing tax revenues and reducing counterfeit products in the market.

Beverage manufacturers have said the Kenya Revenue Authority (KRA)’s directive to have excise stickers placed on all non-alcoholic drinks by the end of next month is not realistic.

Anup Bid, the chairman of the beverage arm of the Kenya Association of Manufacturers (KAM) said adequate training and sufficient time must be given to stakeholders as the rollout demands operational changes and investment in new equipment.

“KRA cannot just spring this on manufacturers without dialogue and sufficient notice,’’ he said. 

The KRA proposed excise stamps on packets and bottles of juices and water in 2013 as part of the Excise Goods Management System (EGMS).
The EGMS is meant to have the twin effect of increasing tax revenues and reducing counterfeit products in the market.

At the time, the KRA proposed harsh penalties on retailers who accept products without tax stamps.

Beverage manufacturers said KRA is going ahead with implementing the directive despite the lack of clarity even after the lobby asked for meetings to sort out the issues.

“We would like to see KRA engage us in the process so that we can prepare ourselves and embrace the changes for mutual benefit,” said Mr Bid.

The Treasury together with the International Monetary Fund have been pushing to widen the tax base by including previously excluded goods in the tax bracket. This has, however, met strong headwinds in the market.