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IMF gives KRA thumbs up for digital excise stamps system

NEWS
By Patrick Alushula | March 5th 2017
KRA Commissioner General John Njiraini

Kenya Revenue Authority (KRA) has received the  backing from International Monetary Fund (IMF) for its new system of putting stamps on excisable goods.

In its first review of Kenya’s performance, IMF has singled out Excise Goods Management System (EGMS) and i-Tax systems as the reasons behind increased revenue collection by the taxman. The IMF noted that the introduction of new systems and continued reforms by KRA has helped increase the amount of revenue collected.

“Receipts of domestic VAT and excise revenues were particularly high reflecting improvements in revenue administration from the i-TAX and EGMS, new i-TAX measures, and the re-introduction of VAT withholding tax,” said IMF in the review. This, it said, was a reflection of improvements in revenue administration from the two systems as well as new excise tax measures and the re-introduction of withholding VAT.

The KRA introduced EGMS in 2013 to safeguard excise tax revenue through application of excise stamps with covert and overt security features.

EGMS excise stamps bear a Quick Response Code that enable distributors, retailers and consumers to use smartphones in confirming the legitimacy of the excisable products. The tax is currently applicable to spirits, tobacco, wine, ready-to-drink alcoholic drinks and beers.

In October 2013, the taxman also rolled out the i-TAX system to make it easier for individuals and businesses to file their tax returns as well as register as taxpayers. KRA records indicate that excise revenue grew by 28 per cent in the year 2015/16 compared with a year earlier, while domestic excise revenue from products controlled under the EGMS system jumped 43 per cent.

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