This archive report was first published on 8 November 2019.
Kenya Revenue Authority (KRA) has started implementing the Excise Goods Management System (EGMS) on bottled water, juices, energy drinks, soda, and other non-alcoholic beverages, effective November 13, 2019, to raise Sh3.6 billion and combat counterfeits.
The move comes after President Uhuru Kenyatta assented to the Finance Bill 2019, which aims to bridge the country's widening budget deficit and meet growing debt repayments.
According to KRA, all products mentioned will be required to be affixed with an Excise Stamp, and the system will see security excise stamps with track and trace features affixed to products at manufacturing plants.
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.
Parliament had earlier cleared the implementation of the EGMS, but a special audit by the Auditor General found that KRA had flouted procurement rules and neglected to table relevant gazette notices on the same before Parliament.
Other new tax measures set to come into effect include an increase on excise duty rates for imported vehicles exceeding 1500cc to 25 per cent, with that of diesel-powered ones above 3,000cc set at 35 per cent.
