•KRA targets to collect an additional Sh4 billion in excise tax, after successfully implementing EGMS on alcoholic drinks and cigarettes in 2013.
•There are about 300 licensed water bottlers in the country.
Water bottlers and dealers say rogue players are flouting the Kenya Revenue Authority (KRA )Excise Goods Management System (EGMS) stamp rule.
The Water Bottlers Association of Kenya (WBAK) said some non-compliant water brands are still in the market undercutting genuine while denying KRA revenue.
This is in the wake of reduced surveillance by KRA officials occasioned by the working from home and social distancing, as the country fights the spread of coronavirus.
“Some people are taking advantage of the situation to sell products without stamps. This is eating into the compliant players' market. They are also evading tax which is wrong,” WBAK chairman Henry Kabogo said calling for increased surveillance.
The EGMS rule on bottled water, juices, and non-alcoholic drinks came into force on November 13.
KRA had given licensed manufacturers, importers, distributors, and retailers until February 29 2020, to clear their old stock and fully comply with the system, which it banked on to boost revenue collection.
“Any products found in the market after February 29, 2020 not bearing an excise stamp shall be seized and offenders prosecuted,” KRA commissioner for domestic taxes Elizabeth Meyo warned on February 14.
She said the system is meant to enhance compliance, address illicit trade and boost revenue collection.
The authority targets to collect an additional Sh4 billion in excise tax after successfully implementing the system on alcoholic drinks and cigarettes in 2013, which helped increase excise tax from Sh700 million to Sh5.6 billion.
With the new line of products, the taxman could collect in excess of Sh9.6 billion.
Yesterday, WBAK said it is doing its market surveillance and will expose all non-compliant products and the brand owners.
“We shall be giving very specific details of these brands,” Kabogo said.
There are about 300 licensed water bottlers in the country.
Out of this, 95 per cent (about 285) have fully complied at the production level, according to WBAK. The rest are affixing the stamps manually.
The Kenya Association of Manufacturers(KAM) had sought a three–month extension for juices, energy drinks, and beverages, arguing that most of these products have a shelf life of more than one year and as a result, manufacturers produce them in bulk.
Manufacturers have also been complaining of a high rejection of products and stamps by KRA printers.
SICPA, the Swiss company contracted to implement the stamp-fixing systems was further blamed for delays to fix any installation issue, resulting in a slow down in production and product damages after digital stamp activation.