Sign up for tax alert emails    GTNU homepage    Tax newsroom    Email document    Print document    Download document

November 5, 2019
2019-6372

Kenya Revenue Authority announces 13 November 2019 as commencement date for Excisable Goods Management System

Executive summary

The Kenya Revenue Authority (KRA) has announced that 13 November 2019 is the commencement date for affixing an excise stamp duty on all bottled water, juices, energy drinks, soda and other non-alcoholic beverages manufactured in or imported into Kenya in accordance with Section 28 of the Excise Duty Act, 2015 and Legal Notice 53 of 30 March 2017 (the Excisable Goods Management System (EGMS) Regulations). The announcement was made through a public notice issued by the Commissioner General on 28 October 2019. Manufactured and imported products in the market prior to 13 November 2019 will be allowed in the market without stamps through 31 January 2020.

The move is aimed at improving tax collections as well as enhancing safety standards by deterring counterfeits in the country.

Detailed discussion

In a notice released on 4 October 2017, the KRA imposed mandatory affixation of stamps on all excisable commodities in accordance with EGMS Regulations of 2017. This was however nullified by the High Court on 12 March 2018 in a case brought by Mr. Okiya Omtata Okoiti (the Petitioner) against the KRA, the National Treasury and SICPA Security Solutions SA (collectively, the Respondents). The Court’s order was issued on the basis that the regulations were enacted without adequate public participation, in an unconstitutional manner and against the provisions of the Statutory Instruments.

The KRA embarked on consultative meetings as well as public participation in a notice dated 30 July 2019 with various stakeholders as well as Parliament. The KRA incorporated the policy enhancements by the Public Investment Committee (PIC), recommendations from the Kenya Association of Manufacturers (KAM), the Water Bottle Manufacturers of Kenya (WBAK) and other representatives which led to a revision of reduced stamp costs by the Cabinet Secretary, National Treasury & Planning from Kshs.1.50 per stamp to Kshs.0.5 per stamp for water and Kshs.0.6 for other non-alcoholic beverages and cosmetics. Other issues resolved as per the notice included the KRA’s conclusion of installing the EGMS in 42 out of 46 automated water and juice production lines. Alternative arrangements were provided for manufacturers with manual production lines. In a separate notice dated 30 August 2019, the Commissioner General indefinitely postponed the intended go-live date of 1 September 2019 to allow manufacturers time to complete installation of the EGMS.

Next Steps

In accordance with section 15 of the Excise Duty Act 2015, only licensed manufacturers and licensed importers of excisable goods can obtain excise stamps. To purchase excise stamps licensed manufactures must go to https://egms.kra.go.ke using the log in details issued after licensing.

Manufacturers, importers, distributors, retailers and the general public must meet the following dates and changes set forth in the notice:

  • 13 November 2019: Any products manufactured or imported into Kenya must be affixed with an excise duty stamp

  • 31 January 2020: The final date that all bottled water, juices, energy drinks, soda and other non-alcoholic beverages manufactured or imported into Kenya prior to the go-live date will be allowed in the market without stamps

For additional information with respect to this Alert, please contact the following:

Ernst & Young (Kenya), Nairobi

ATTACHMENT

 
 

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

 

Copyright © 2024, Ernst & Young LLP.

 

All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.

 

Any U.S. tax advice contained herein was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.

 

"EY" refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.

 

Privacy  |  Cookies  |  BCR  |  Legal  |  Global Code of Conduct Opt out of all email from EY Global Limited.

 


Cookie Settings

This site uses cookies to provide you with a personalized browsing experience and allows us to understand more about you. More information on the cookies we use can be found here. By clicking 'Yes, I accept' you agree and consent to our use of cookies. More information on what these cookies are and how we use them, including how you can manage them, is outlined in our Privacy Notice. Please note that your decision to decline the use of cookies is limited to this site only, and not in relation to other EY sites or ey.com. Please refer to the privacy notice/policy on these sites for more information.


Yes, I accept         Find out more