CRACKDOWN

KRA warns against alcohol counterfeits, goes after rogue players

Nairobi, Nakuru and Central Kenya marked hot spots

In Summary

•Deputy Commissioner policy and tax advisory-Domestic Taxes Department-Caxton Masudi says rogue players took advantage of the Covid-19 to manufacture fake products.

•This is after KRA withdrew some of its market surveillance and enforcement officers from the field to reduce exposure to the virus.

A file photo of police officers destroying second generation alcohol.
A file photo of police officers destroying second generation alcohol.

The Kenya Revenue Authority(KRA) has heightened market surveillance and crackdown on fake and counterfeited alcoholic products which are putting public health at risk, undercutting genuine players and denying the taxman revenues.

Deputy Commissioner policy and tax advisory-Domestic Taxes Department-Caxton Masudi has said rogue players took advantage of the Covid-19 to manufacture fake products.

This, as KRA withdrew some of its market surveillance and enforcement officers from the field to reduce exposure to the virus.

“The issue that we picked out is that during this Covid timing, between March and June, the illicit products in that sector went up, because when we withdrew the officers from enforcement, I think they tried to take advantage of it,” Masudi told the Star in an interview at the agencies' Nairobi headquarters.

When we went back to checkout how the market was , we found that yes, that sector had been abused. But we have put back the enforcement teams in the market and they are picking them out,” he added.

Nairobi, Nakuru and the central Kenya region have been marked as hot-spots.

“Those are our major areas where we think there is a problem, and we are working in those areas now,” he said, calling on the public, distributors and retailers to be vigilant and help flash out the fakes.

One of the ways to identify the illicit products, Masudi said, is by the use of the 'Soma Label' online application, used to distinguish between genuine and fake excise stamps.

In June, KRA in collaboration with DCI detectives impounded illicit liquor worth Sh4 million in Nakuru.

This was after a multi-agency operation in three areas -Phoenix Wines and Spirits Depot located in Ahero, Mich Wholesalers in Subukia and Savannah Wines and Spirits in Bahati area of Nakuru county.

"The company was found to be manufacturing counterfeits of genuine alcohol brands," KRA's commissioner, domestic taxes Elizabeth Meyo had said.

In Nairobi, Kariobangi Light Industries, Kenya's most prominent informal manufacturing hub, has been identified as a hot spot for manufacturing of fake products, mos which counterfeit genuine local and international brands.

The Excise Goods Management System (EGMS) is one of the ways KRA is using to weed out fake products.

It was first , successfully, implemented on alcoholic drinks and cigarettes in 2013, which helped increase excise tax from Sh700 million to the current Sh5.6 billion annually.

KRA is currently implementing EGMS on water, juices and non-alcoholic drinks, expected to boost revenue collection from these products by between Sh3.5 billion and Sh4 billion annually.

 

From December 2013 to June 2020, KRA has facilitated 811 arrests and prosecutions related to EGMS cases, especially rogue players found with fake stamps and tax evasion.

In the past , using our EGMS system we were able to identify 177 companies that were illegally producing alcohol and we shut down all of them,” Masudi affirmed.