This archive report was first published on 31 July 2019.
The Kenya Revenue Authority (KRA) is set to start implementing the controversial Excisable Goods Management System (EGMS) from September 1, 2019. The system aims to raise more than Sh3.6 billion from manufacturers of bottled water, non-alcoholic drinks, and cosmetics.
According to KRA, almost all automated water and juice manufacturers have installed the new system, with 42 out of 46 production lines already equipped with EGMS. Alternative arrangements have been made for manufacturers with manual production lines.
The EGMS will see security excise stamps with track and trace features affixed to products at the point of manufacturing in a bid to fight tax evasion and illicit trade. However, manufacturers have warned that the system will have a negative impact on the industry by raising operational costs, thus significantly increasing the cost of doing business in the country.
"The costs attached to EGMS range from Sh0.50 to Sh2.80 per unit, which are high for all manufacturers and untenable for small industries, which will impact negatively the competitiveness of the industry," said the Kenya Association of Manufacturers Chairman Sachen Gudka.
Activist Okiya Omtata has since moved to the Supreme Court to challenge the system, citing irregularities in KRA's procurement process.
