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KRA launches digital excise stamps to seal tax leakages

Monday September 5 2016

Government has sold a 26 per cent stake in Kenya Wine Agencies Ltd (Kwal) to a South African wines and spirits marketer. Photo/FILE

A customer buys wine at a Nairobi supermarket. The new stamps are part of the KRA’s wider scheme to ride on the electronic goods management system (EGMS) to combat illicit trade. FILE PHORO Nation Media Group

By NEVILLE OTUKI, [email protected]

The Kenya Revenue Authority (KRA) has introduced new generation excise stamps for wines, spirits, tobacco and beer that will be verified using smartphones in efforts to seal tax leakages.

The new excise stamps have a quick response code (QR code) that will allow distributors, retailers and consumers to use an app on their smartphones to verify the authenticity of the products.

The taxman, however, said that the old generation paper stamps affixed on wines, cigarettes, beers and spirits will continue to be used in the meantime until all products on which they have been affixed are consumed.

The new stamps are part of KRA’s wider scheme to ride on the electronic goods management system (EGMS) to combat illicit trade, seal revenue leakages and boost collection.

Consumers verify

The KRA missed its 2015/2016 financial year target by Sh6.5 billion, booking a total tax collection of Sh1.210 trillion against a target of Sh1.217 trillion.

The taxman reckons that the smartphone use will enable manufacturers, distributors, retailers and consumers to verify and trace all excisable goods throughout the distribution chain.

‘The verification of the new excise stamps using a smartphone app will further enable consumers to verify that the products are genuine hence guaranteeing their safety,” KRA commissioner for domestic taxes Benson Korongo said in a statement.

KRA records indicate that excise revenue grew by 28 per cent in the year 2015/16 compared with a year earlier while domestic excise revenue from products controlled under EGMS system jumped 43 per cent.

“Following the strong revenue performance of the products managed under EGMS, the Authority is in advanced consultations with relevant stakeholders for the roll out of the system on the remaining excisable goods” said Mr Korongo.