By KIARIE NJOROGE
In Summary
- The authority has asked the manufacturers to write to it explaining the difficulties they are facing in complying after which it will review their cases individually and issue the temporary letters of operation.
- The agreement with Kenya Association of Manufacturers (KAM) will offer a reprieve to manufacturers whose products would have been taken off the shelves by retailers to avoid conflict with the taxman.
- On Wednesday, KAM said the taxman had denied more than 80 per cent of its members the excise tax licence, effectively prohibiting them from manufacturing and selling excisable goods.
The Kenya Revenue Authority (KRA) has adopted a
softer stance allowing manufacturers who are yet to get their excise
duty licences to continue operating provided they get interim letters of
operation from the taxman.
The authority has asked the manufacturers to write to it
explaining the difficulties they are facing in complying after which it
will review their cases individually and issue the temporary letters of
operation.
The agreement with Kenya Association of
Manufacturers (KAM) will offer a reprieve to manufacturers whose
products would have been taken off the shelves by retailers to avoid
conflict with the taxman.
“All manufacturers and importers of excisable goods
that are experiencing difficulties in complying with KRA’s requirements
due to reasons beyond their control should write to KRA and clearly
highlight the challenges and where applicable, attach supporting
evidence,” said a statement issued Friday by Alice Owuor, Commissioner
of Domestic Taxes and Phyllis Wakiaga, KAM chief executive.
“KRA, through an internal committee will review all
appeals from the different companies within the sectors and issue them
with letters allowing them to continue operating and also enable them
sell goods that were manufactured prior to the public notice issued by
KRA on July 24 that listed companies licensed to transact in excisable
goods.”
The interim letters of operation will be issued on a
case-by-case basis for varying lengths of time considering how much
time an individual company needs to meet the remaining requirements.
On Wednesday, KAM said the taxman had denied more
than 80 per cent of its members the excise tax licence, effectively
prohibiting them from manufacturing and selling excisable goods.
The industrialists had blamed the taxman for
failure to properly coordinate implementation of the new legal
requirements, causing delays in compliance.
KRA introduced new requirements for issuance of
excise tax licence at the beginning of the year after some companies had
already submitted their applications, forcing them to withdraw and
begin the process afresh.
An updated list of companies that have complied with the requirements will be released in a week.
Among the requirements is letters from the county government and Credit Reference Bureau.
The communique added that KAM and KRA will review
the requirement for traders to produce a letter from the county
government as evidence that a factory is located in a designated area.
KRA had licensed only 85 manufacturers and 48 importers to sell their products by July 24.
KAM has more than 850 members in a sector that
contributes about a quarter of the country’s Gross Domestic Product
(GDP) and employs over a million people.
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