Illicit trade is hurting tax collection and putting lives at risk

Suspected contraband liquor seized by police and KRA officials in Bureti, Kericho county. [File, Standard]

The excisable goods trade is a critical revenue mobilisation sector for ordinary revenue collections in excise taxes. During the last financial year, Sh73.624 billion was realised, significantly contributing to the Sh2.407 trillion total revenue collected. This revenue sector comprises of manufacturers of soft drinks, bottled water, beer, and tobacco.

This sector, however, is still marred with various tax evasion schemes which include use of counterfeit excise stamps on excisable products, sale of excisable goods without stamps, manufacturing of excisable products without excise licences, use of proxy companies to procure raw materials and smuggling of goods (raw materials) into the country.