This archive report was first published on 27 August 2019.
On August 27, 2019, the National Treasury Cabinet Secretary defended a new tax system set to start in September, amidst concerns from companies that it may be riddled with inefficiencies and affect manufacturing times.
The Excisable Goods Management System (EGMS) tax system is expected to help the Kenya Revenue Authority (KRA) net Sh3.6 billion more revenue.
The system, which is a security solution provided by Swiss firm SICPA Securities sol S.A., aims to protect manufacturers and consumers from counterfeits.
However, firms including Kevian Kenya, Nuteez Peanut Butter maker Jetlak Foods, Delmonte, PZ Cussons EA, Kenafric Industries, Nivea products maker Beiersdiorf Eastafrica, L'Oreal and Ketepa had rushed to court last month over the EGMS tax system.
The firms had sued the State as members of the association of manufacturers, importers, distributors and retailers claiming that roll-out of EGMS was done without consultation and lacked legal basis.
The National Treasury Cabinet Secretary denied allegations that the new system is riddled with inefficiencies and that its installation would affect manufacturing times as well as lead to loss of sales due to frequent breakdown.
“On account of its features, the EGMS solution enables KRA to meet its core objectives and further protects manufacturers and consumers from the ills of counterfeiting to their immeasurable benefits,” said the CS in suit documents.
