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KRA Insists On Implementation Of Excise Duty On Bottled Water Amid Court Injunction

The price of bottled water is set to go up [PHOTO/ COURTESY]

Kenyans will have to dig deeper to quench their thirst as from tomorrow, November 13 following the implementation of new excise duty on bottled water and other non-alcoholic beverages.

In a public notice, the Kenya Revenu Authority indicated that the Excisable Goods Management System (EGMS) will go live tomorrow, a move that will see the price of bottled water, juices, energy drinks, soda and any other non-alcoholic beverage hiked.

Licensed manufacturers, bottlers and importers will now be required to affix Excise Stamps from KRA on the products in a bid to enable implementation of the tax.

All related products imported or manufactured before the date of going live will still be allowed into the market without stamps until January 31, 2020.

Read: Price Of Bottled Water To Rise By 80 Percent Upon Implementation Of EGMS – WBAK

“All products manufactured  or imported on or after 13th November, 2019 found not bearing an excise stamp or, manufactured or imported before 13th November, 2019 and found in the market after 31st January, 2020 not bearing an excise stamp, shall be seized and offenders prosecuted,” read the KRA public notice published on the dailies.

KRA Commissioner for Domestic Taxes, Elizabeth Meyo said that the implementation of the system will increase revenue collection by approximately Ksh4 billion.

“Currently we have up to 78 percent of companies in the water sector who are not paying their fair share of taxes. This is not fair to the 22 percent who are compliant. The system will, therefore, enable KRA to monitor and ensure that all traders within the sector are compliant,” said Meyo.

About 450 companies will be affected by the rollout. 64 production lines are automated while the rest are manual.

Read: We Have Not Suspended Taxes On Bottled Water, Non-alcoholic Beverages – KRA

EGMS was first rolled out in 2013 on alcohol and cigarettes. Since then the system has enabled KRA to raise Ksh 5.6 billion monthly.

This comes despite a court order barring the taxman from implementing the taxes, until a case filed by Kenya Association of Manufacturers (KAM), importers, distributors and retailers of bottled water, soda and cosmetics is determined.

High Court Judge Justice James Makau will rule on the matter on November 21.

Speaking early this week, Kenya Association of Suppliers Chief Executive Officer Ismael Kibet said the honourable thing KRA should do is to wait until the court pronounced itself on the matter.

“We hope and believe that as an agency of government, they will respect the court order and await for the final ruling of the case,” Mr Kibet said.

He said an estimated 30 million bottles of soft beverages and bottled water are produced daily.

“The manufacturers will have to pass the cost to consumers for the Sh1.50 levy and an additional cost for the new lines because KRA refused to shoulder the burden,” Kibet said.

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Written by Francis Muli

Follow me on Twitter @francismuli_ Email:

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