The Public Investment Committee has raised alarm over what it terms a grand "Stamp Gate" scandal involving Sh160 billion at the Kenya Revenue Authority (KRA).
In a press statement, the Leader of Minority in the National Assembly Opiyo Wandayi alleged that the billions of shillings are being siphoned through the Excisable Management System (EGMS) where KRA targets to improve its collection of excise revenue through a track and trace solution.
According to Wandayi, the tax collector has issued three different controversial contracts to a Swiss supplier known as SICPA Security Solutions SA between 2011 and 2015. The contracts have never been made public.
“The National Treasury has on different occasions changed the regulations and in 2015, this led to a cancellation of the contract between KRA and SICPA after its legality was questioned by the Office of the Auditor General," said Wandayi.
The latest contract commenced on October 1, 2015 for a period of five years at the cost of, minimum of Shs15 billion and a maximum of Shs17 billion. That contract expired on October 30, 2022, Wandayi’s statement said.
The Leader of Minority further stated that during the 12th Parliament, it was revealed that EGMS system was collecting Sh42m a day which translated to Sh81 billion in five years.
“Given that the contract cost was Sh17 billion, SICPA would therefore be making a profit of Shs64 billion in 5 years after fully recovering the cost of supplying the equipment to KRA,” he added.
Wandayi, who is also the Ugunja Member of Parliament, has also raised concern over the integrity of SICPA, adding that it has been mentioned in over 13 countries on allegations of corruption including India, Egypt, Ukraine, Vietnam and Malawi.
Among the recommendations by the Public Investment Committee on the same include KRA to share their current Excisable Goods Management Systems with the Kenya Bureau of Standards (KEBs) and the Anti-Counterfeit Authority (ACA) at no extra cost to the manufacturers, KRA, KEBs and ACA should develop a multifunctional stamp for use by the three government entities, or any other that will need the system, and Parliament to amend the relevant laws to exempt “plain drinking water” from any taxation.
The EGMS implementation started with tobacco, wines and spirits but was later expanded to cover soft drinks, juices, water and cosmetics.