Kenya Expects 20% Rise From New Tax System

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Kenya-Revenue-Authority1Kenya Revenue Authority (KRA) has implemented a new tax management system which will curb tax evasion and see revenue grow by 20 percent.

Dubbed the Excisable Goods Management System is expected to eliminate excise tax fraud facilitated through under-declaration or non-declaration of excisable goods.

Having noticed sharp practices by dealers in wines, spirits and tobacco in the past, the government agency expects the new system, which provides for online ordering and approval for delivery to curb the menace.

Kenya has taken measures in the past to ensure more revenue is generated from tobacco, wines and spirits, and to phase out sub-standard products. New excise stamps were introduced last year to replace the stamps introduced in 2007 in order to curb tax evasion which was rampant in the industry.

The agency went round shops and hotels last week looking to nab retailers selling tobacco, wines, or spirits bearing the old or fake excise stamps.

The KRA had hoped that after successfully locking out contraband and sub-standard products from the local market, an additional Sh6 billion ($69.6 million) would be raised from the economy. KRA prompted by a revenue shortfall of Sh321 billion ($3.7 billion) in the first nine months of the 20012/13 financial year saw the need to enforce existing excise rules and strengthen the structure on ground.

Following the launch of the new system, KRA told companies dealing in related products to provide data on their brands and packaging volumes of their products, which will be integrated into the system.

“This module of the system enables KRA to effectively manage the stocks as well effectively identify the point of loss in the case the stamps are lost or stolen,” said KRA in a statement released yesterday.

It will ensure accurate declaration of volume of production to enable regulators associate each individual stamp to the package to which it is affixed.

With the new Excisable Goods Management System, KA hopes to raise more revenue for Kenya, as the country continues to open up for growth and investments.

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