KRA rolls out new excise stamps from Monday in tax fraud fight

The Kenya Revenue Authority (KRA) has introduced new excise stamps for beer, spirits, water, tobacco, soft drinks and juices as it races to beat cartels running away with billions of shillings in taxes through counterfeits.

The new generation excise stamps, which have upgraded security features, will be rolled out in three phases starting Monday next week.

Packages of wines, spirits, ready-to-drink beverages, beer and some tobacco products will from December 6 bear the new excise stamps while water, soft drinks, and juices with be affixed with the stamps from December 28. The last phase of the new excise stamps rollout will take effect on February 1, 2022, and cover tobacco products and keg beer.

“Pursuant to the provisions of the Excise Duty (Excisable Goods Management System) Regulations, 2017, Kenya Revenue Authority is rolling out a new generation of excise stamps. The aim is to continuously review and improve the security features of excise stamps leveraging on new and emerging technology,” the taxman said in a circular to manufacturers and traders Monday.

The new excise stamps replace the current batch that was introduced five years ago.

“Taxpayers who shall have stocks of the current generation of excise stamps remaining in their premises after the date of the rollout will be allowed to consume the stocks in their premises within one month from the date of the rollout. Any paper stamps remaining after the one month shall be returned to KRA,” the taxman added.

This means that consumers should avoid wines, spirits, ready-to-drink beverages, beer, and tobacco bearing the current excise stamps from January 5, 2022.

The current lot of excise stamps will also be obsolete on water, soft drinks and juices from January 26 next year.

Treasury has raised the target for excise duty this financial year by Sh18.6 billion on the back of longer operating hours for entertainment joints and increased rates of taxation.

Treasury secretary Ukur Yatani in the latest projection expects the KRA to collect Sh259.6 billion in excise taxes compared with Sh241 billion in the budget approved by lawmakers in June Alcohol and cigarettes, mainly sold in bars and restaurants, are the largest contributors to the excise duty receipts, accounting for more than three-quarters of the collections.

KRA, for example, now charges an excise duty of Sh278.70 per litre of spirit, Sh208.20 for a litre of wine, and Sh121.85 for beer, while smokers pay Sh3.48 per stick with a filter.

The Treasury said excise taxes in three months through September jumped 23.4 per cent to an estimated Sh58.4 billion compared with Sh47.35 billion in a similar quarter last year.