Manufacturers have accused the Kenya Revenue Authority of bulldozing the planned roll out of the e-tax stamp duty system despite numerous concerns.
Their main concern is that the Excise Goods Management System will push up the cost of doing business.
The Kenya Association of Manufacturers yesterday made a passionate appeal to President Uhuru Kenyatta to suspend the implementation until all sticking points are ironed out.
Appearing before the National Assembly’s Public Investment Committee chaired by Mvita MP Abdulswamad Nassir, KAM officials said the EGMS will add to the many taxes manufacturers are currently grappling which threaten to drive investors to neighbouring countries.
KAM vice chairman Mucai Kunyiha, said the systems implementation will not only lead to job losses but derail Jubilee’s Big Four agenda.
EGMS was supplied by Swiss firm SICPA Security Solutions SA Limited at a cost of sh 17.7 billion.
“The cost of stamp for each category of goods has been set out in the Excise Duty Regulations of 2017. The stamp is additional to Excise Duty tax under the Excise Act. This therefore amounts to double taxation,” he said.
Kunyiha said they have never endorsed the system contrary to what KRA Commissioner General John Njiraini told the committee on Tuesday.
He said KAM’s proposal was that the cost of the EGMS be covered by the excise tax payable to avoid burdening manufactures or passing the cost to consumers.
“The recent suspensions by the National Assembly and the extension of the implementation date by KRA attests to the fact there are concerns that are yet to be resolved in the country,” he said
An official from cigarette firm BAT said they are not opposed to the e-system that tracks tax collection, but the cost of implementation.
She said the system which is already being used on cigarettes has not helped stem illicit trade and called for a review.
“We have been in operation in this country for 50 years but that is now in the brink of coming to an end,” BAT representative Victoria Kaikai said, adding that Uganda and Tanzania had better incentives.