KENYA – The Kenya Revenue Authority (KRA) has introduced excise stamps on additional products from next month as it moves to seal leaks in the backdrop of higher collection targets set by the Treasury.

The taxman said manufacturers will from November 1 be required to affix the new generation excise stamps on bottled water, juices, soda, energy drinks, other non-alcoholic beverages, food supplements and cosmetics.

This tax is paid by the manufacturer or service provider but is borne by the consumer.

Although the cost of compliance is expected to be borne by the manufacturers, they may opt to pass it to the consumer, further raising prices of these products.

“In order to ensure compliance, licenced manufacturers and registered importers of the affected products are advised to facilitate KRA technical teams to access the production lines for purposes of determining the installation requirements,” KRA commissioner for domestic taxes Benson Korongo said in a notice.

Other excisable products, including beer, opaque beer, potable spirits and wines, ethyl alcohol, tobacco and tobacco products are already covered.

Excise tax is payable on production or supply of a service and to domestic output or imported products.

The KRA introduced the use of stamps under its Excisable Goods Management System (EGMS) which kicked off three years ago, part of a wider scheme to combat illicit trade, seal revenue leakages and boost collection.

The stamps allow consumers to verify authenticity of a product using smartphones.

The Treasury has raised targets for the taxman in the next financial year as it plans to stabilise its debt and consolidate economic growth, newly published estimates show.

The KRA is expected to collect Sh1.69 trillion in the next financial year up from Sh1.47 trillion up to next June.

The taxman said it collected Sh1.365 trillion in the 12 months to June 2017 against a target of Sh1.376 trillion.

Business Daily