Revenue from sin taxes down by Sh4bn in only nine months

KRA commissioner-general John Njiraini. FILE PHOTO | NMG 

In Summary

• KRA collected Sh117.48 billion between July and last March compared with Sh121.57 billion, data collated by the Central Bank of Kenya indicates.
• The drop in excise duty has been largely linked to a rise in production and sale of counterfeit and illicit products.
• The KRA has struggled to collect targeted Sh1.44 trillion tax this fiscal year, collecting Sh909.67 billion in the period.

By CONSTANT MUNDA
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Taxes from excisable goods such as beer, spirits and cigarettes fell by nearly Sh4.09 billion in the first nine months of the current financial year compared to last year, the latest official statistics show.

The Kenya Revenue Authority (KRA) collected Sh117.48 billion between July and last March compared with Sh121.57 billion, data collated by the Central Bank of Kenya indicates.

The drop in excise duty has been largely linked to a rise in production and sale of counterfeit and illicit products, a development that prompted the taxman to conduct a three-week awareness campaign to February 28.

Manufacturers, distributors, retailers, importers and the police were sensitised on how to verify genuine alcoholic products using an app named “Soma Label” on their smartphones.

That came just a day after commissioner-general John Njiraini had in a statement to newsrooms described the 16.3, 16.0 and 11.2 per cent drop in duty collected from beer, cigarettes and spirits, respectively, in six months to December as “unusual”.

READ: Treasury CS Rotich appeals excise tax judgment

New generation excise stamps affixed on beer, spirits, wines and cigarettes under the Excisable Goods Management System enable KRA officers to track excisable goods along the supply chain, making it easy for dealers to account for goods manufactured or imported.

The ‘Soma Label’ app enables dealers, law enforcers and consumers to authenticate the stamps and excisable goods.

Reports of increased production of fake excise stamps were rife earlier in the earlier, enabling processing or importation and distribution of substandard alcoholic drinks.

The KRA has struggled to collect targeted Sh1.44 trillion tax this fiscal year, collecting Sh909.67 billion in the period. That’s a 7.59 per cent growth over the same period last year.