The requirement to affix excise stamps on excisable is underpinned under the Excise Duty Act 2015 and Legal Notice No.53 of 2017 respectively.

Section 28(1) (b) Excise Duty Act 2015 provides for the use of an excise goods management system to affix excise stamps. This Kenya Revenue Authority has done through the Electronic Goods Management System (EGMS) in 2013.

KRA decided to implement EGMS in two phases with the First Phase covering wines, spirits, beer and cigarettes commencing in 2013. The Second Phase of the EGMS was to include other excisable products namely; bottled water, juices, soda in PET, energy drinks, other non-alcoholic beverages food supplements and cosmetics.

On 3rd of October 2017 the Commissioner of Domestic Taxes issued a Public Notice pursuant to section 28 of the Excise Duty Act 2015 as read together with Legal Notice No. 53 of 2017 to notify the public of the intended roll out of the Second Phase which was to take effect from 1st November, 2017

A Petition was filed by one Okiya Omtatah being Petition No. Nairobi H.C. Constitutional Petition No. 532 2018 which Petition brought out issues of public participation and questioned the procurement process of the EGMS.

This Petition was heard and High Court in its Judgment of 12th March 2018, held in favour of Okiya Omtatah hence halting the implementation of this Second Phase of the EGMS.

Dissatisfied with the holding of the High Court, KRA appealed this decision at the Court of Appeal and contemporaneously filed an Application for Stay of the High Court Judgment. In its Ruling the Court of Appeal agreed with KRA and granted stay of the High Court Judgment on 11th May 2018. This in effect allowed KRA to proceed with the implementation of the Second Phase of the EGMS.

KRA subsequently embarked on extensive stakeholder engagement and rolled out pilot programs with some of the manufacturers of excisable goods with the system go live date expected to be on 13th November, 2019. The full implementation of the EGMS is expected to net more revenue from excisable goods in addition to tackling counterfeit goods and deterring smuggling. This in essence will provide a level playing ground for all manufacturers and importers of excisable goods as well as ensure they all contribute to the tax basket equitably.

Commissioner for Legal Services and Board Coordination, Paul M. Matuku