KENYA – All beer packages, either manufactured locally or imported, will be required to have mandatory excise stamps affixed on them starting February 1 as the taxman moves to seal revenue leaks.
Kenya Revenue Authority (KRA) Commissioner for domestic taxes Alice Owuor said all players in the beer supply chain will be required to comply with the directive.
“From February 1, 2016 all manufacturers, importers, wholesalers, retailers and other outlets are advised to ensure that all beer bottles and keg containers delivered or received for distribution, sale or consumption have affixed on them the excise stamps or codes,” she said in a notice on Thursday.
KRA has recently stepped up its push for tax compliance and even launched a crackdown on manufacturers without excise licences.
Excise tax is payable on production or supply of a service and to domestic output or imported products.
It is paid by the manufacturer or service provider but is borne by the consumer as part of the cost of the excisable product or service. The law bars manufacturers or retail chains from releasing products into the market without an excise licence.
Excisable products include beer, opaque beer, potable spirits and wines, ethyl alcohol, tobacco and tobacco products, polythene bags, juices and other non-alcoholic beverages, soft drinks (sodas), cosmetics and bottled water.
“Holding of stock is not illegal. Release of excisable products into the local market or offering the same for sale, however, is illegal. For this reason, our focus is on market surveillance and organisational compliance,” Ms Owuor told Business Daily recently.
Under Section 116 (b) (3) of the Customs and Excise Act, no person shall import, distribute, offer for sale or be in possession of any excisable goods without the authority of the Commissioner.
Any person who contravenes the above sections shall be liable to a fine and the subject goods shall be seized and destroyed at the offenders’ cost.
“The authority, does not intend to go slow in the execution of its mandate and the relevant enforcement actions will continue to be taken where necessary,” Ms Owuor added.
The taxman is under pressure to improve on its collection amid missed targets that have plunged the Treasury into a cash crisis.
The government last month implemented the Excise Duty Act 2015, pushing up the prices of key consumers goods including beer, juices, water, second-hand cars and motorcycles as the Treasury moved to improved tax collections.
The move saw beer prices go up by Sh30 per litre, kerosene by Sh5.75 a litre, bottled water up by Sh7 a litre, juice is up Sh10 a litre while a charge of Sh10,000 is now applicable on motorcycles.
Cigarettes are now charged Sh2, 500 per 1,000 sticks, up from Sh1, 200, or a stick is up Sh1.30.
The government expects to raise an additional Sh25 billion from the new levies that Treasury secretary Henry Rotich introduced in June 2015 to help fund his Sh2.1 trillion budget.
The new excise tax law put the charge on imported vehicles more than three years old at Sh200,000 and Sh150,000 for newer ones — a departure from the 20 per cent duty charged on a vehicle’s value.