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Kenya Revenue Authority (KRA) moves to tighten grip in fight against illicit alcohol

BUSINESS
By Patrick Alushula | Sep 22nd 2016 | 2 min read
By Patrick Alushula | September 22nd 2016
BUSINESS

Kenya Revenue Authority (KRA) wants to ride on inter-agency collaboration to crack whip on fake alcohol stamps that has cost the agency billions of shillings in tax revenue.

According to KRA Commissioner General John Njiraini, the taxman is taking a number of measures, including use of smartphones, to curb the vice.

He said very soon consumers will be able to know the status of any alcoholic product they buy by scanning code displayed on their favourite drinks using the smartphones.

This, he said, is being implemented in collaboration with Alcoholic Beverages Association of Kenya (ABAK), which is an umbrella body for alcohol manufactures and importers in Kenya.

“We have agreed with ABAK on joint public sensitisation on soon to be launched public application which is part EGMS (Electronic Goods Management System) system that will be used by public to help in authentication of excisable products on the market,” said Njiraini.

With the system, alcohol users will be able to scan the stamps on alcoholic drink and then receiving response on status of the stamp.

Having significantly scaled down the number of licensed alcoholic manufacturers from 176 to 21, the regulator also wants to work with ABAK to develop an intelligent strategy system.

This will allow the public to report cases of fake stamps while retaining anonymity. According to ABAK Chairman Gordon Mutugi, the move will help protect quality of alcohol, boost confidence of consumers as guard the industry’s earnings. .

“Because of illicit and counterfeit products, our industry is losing close to 30 per cent of our annual volumes of spirits and wines. That is also loss of about 20 to 30 per cent of revenue that should be going to KRA,” said Mutugi.

The alcohol industry, according to Mutugi, directly contributes over Sh30 billion taxes. When added to associated costs such as licensing, the contributions is close to Sh60 billion.

Last year alone, over 400 cases involving distributors selling alcohol with fake stamps were in court. In the same year, KRA also prohibited the importation of ethanol by non-licensed manufacturers of alcohol. Before that, any one could import ethanol, and distribute it.

"This has had a major impact in reducing ethanol, which is a precursor of preparing dangerous drinks," said Njiraini adding that the menace was widespread in western Kenya.

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