EGMS FAQS
1. Q: What is excise duty?
A: It is a duty imposed on goods & services manufactured in Kenya or imported into
Kenya as specified in the 1st Schedule of the Excise Duty Act, 2015.
2. Q: Who should pay excise duty?
A: All manufacturers, providers and importers of excisable goods and services
3. Q: What is the Excisable Goods Management System (EGMS)?
A: It is a system for protection of excise tax revenue which comprises of an
enhanced excise stamp with multiple security layers.
4. Q: Which items bear the stamp?
A: The law requires that all manufactured or imported excisable goods (other than
motor vehicles) bear an excise stamp: Currently tobacco, wines, spirits beer. We are
working on implementing this to soft drinks & bottled water,
5. Q: How are the stamps affixed?
A: The stamps are affixed on the tearing joint of all bottles or containers of wines,
spirits or cigarettes
6. How can I differentiate a genuine and a fake stamp?
A: You can SMS the code to a number that will be soon rolled out to the public or get in
touch with us through our Market and surveillance department or Excise department.
7. When is the deadline for having the Excise stamp on Beer?
A: all beer in the market should bear the excise stamp by 30th June 2016. Beer
manufactured or imported from 1st March, 2016 should bear an excise stamp.
8. Who is eligible to acquire excise duty stamps?
A: Only licensed manufacturers and importers are eligible to attain excise stamps.
9. How do I register for an excise license?
A: Applications maybe done via the iTax portal. Log in to iTax> click on the registration
tab> other registration > Excise License. Complete the form and submit the required
documents to the Excise Office
10. What is the cost of an excise stamp?
A: it is Ksh. 1.50
11. Where can I get more information about EGMS?
A: The Excise Act section .28, Legal notice number 110 of 18th June 2013.
12. How can I access the EGMS portal application?
A: Log in to www.egms.kra.go.ke. Login credentials are however given to licensed and
registered manufacturers and importers.
13. Q: How do I get the excise stamps?
A: Excise stamps are supplied by KRA to manufacturers and importers of Excisable
goods licensed/registered by the Commissioner.
14. Q: Are both locally manufactured and imported items affixed with the
same stamp?
A: All cigarettes, wines and spirits are affixed with a paper stamp whether locally
manufactured or imported.
Locally manufactured beer may bear a digital stamp printed directly onto the cap of
the product or paper stamp depending on the cap and the automation levels of the
production line. Locally manufactured soft-drinks, juices & bottled waters
manufactured in Kenya, a digital excise stamp will be printed directly onto the
product. Adhesive paper stamps will be applied on soft drinks, juices and bottled
imported before entering the Kenyan market.
15. Q: Is there a special application for verification or it is the standard QR
reader?
A. A special stamp verification app will be launched that will enable the public also
verify security features and report any cases of inconsistency to KRA.
16. Q: What are the functions of the EGMS?
a. Combat illicit trade
b. Serve as prove that duty has been paid on the item on which a stamp has
been affixed
c. Account for production/importation
d. Enhance tax compliance
17. Q: What capabilities does the EGMS have?
a. Enables retailers and distributors to authenticate products
b. On the spot seizure of illicit products and arrest of offenders
c. Reporting and business intelligence for informed interventions
d. Management and control of field officers
e. Remote and automated production accounting and monitoring
18. Q: Has EGMS achieved any results so far?
A: Yes
a. In over 20 million cigarettes were seized
b. In 2014, excise revenue on imported cigarettes rose by 4728%
c. Excise revenue increased by 40% on Spirits during enforcement period
d.
e.
f.
g.
h.
i.
Over 500 cases have been prosecuted
100% prosecural rate
Slower growth of importers
Increase in the consumption of legitimate products
Business intelligence for effective intervention
Significant reduction in illicit tobacco trade (from 15% to less than 5%)
j. Increase in the declaration of importation of wines
19. Q: Why are we charging Ksh 1.50 on Excise Stamps
-
Legal Notice No. 110 of 18th June, 2013 Manufacturers and Importers shall
purchase excise stamps from the Commissioner at a prescribed fee which
shall be retained by the Commissioner for financing the System.
20. Any issue raised so far because of the Ksh. 1.50?
-
Manufacturers of juices and water through their industry body (KAM) say
that the Sh1.50 per bottle or packet of excisable goods will greatly increase
their cost of operations for the smaller Stock Keeping Units (SKUs). KRA,
National Treasury and the service provider are however working on
identifying of a pricing model that suits low priced products.
21. Do we need the stamp for export products?
-
Stamps are not required for export products
22. What is the legal backing for the stamp/legal notice?
-
The stamp price of Ksh 1.50 was gazetted on 9th of November, 2013 after
KRA determined the cost of the system through the tender process and
engagement with the existing stakeholders (manufacturers of Tobacco, wines
and spirits)
23. When will water and juice get on board?
-
KRA is working on the extended programme, which will include expanding
the application of the system to cover over beverages including juices, sodas
and other non-alcoholic drinks and bottled water. Excise stamps (paper and
digital) were introduced on Beer in February, 2016.
24. What are the revenue benefits of EGMS?
-
Increase of revenue from tobacco from Ksh 280m per month in 2003 to Ksh
450 per month by 2004. With the roll out of EGMS in 2013, the tobacco
revenue grew by Ksh 1 billion per month by January 2015.
-
In relation to Spirit, the excise tax initially grew by 40% leading to an
additional collection of Ksh 1 billion in the first year (2013- 2014).
Subsequently, total collection has risen from Ksh 300 million per month to
Ksh 600 million per month in 2014/2015. It is projected that monthly
collections will rise to Ksh 800 million per month by 2016/2017.
25. What does the economy loose due to illicit trade
-
Leads to loss of business of more than Ksh. 70 billion annually
-
Loss of taxes of more than Ksh 30 billion annually
-
Health risks to consumers since they are produced in unapproved production
facilities
-
The illicit products may cause death. For example in the last 5 years, 200
Kenyans have died due to consumption of illicit alcohol.
-
Create unfair completion to legitimate traders.
-
Illicit trade has for a long time been associated with organized cime and
money laundering.
26. How is EGMS helping reduce illicit trade
-
Enables retailers and distributors to authenticate products
-
Provides a level playing field for all manufacturers and importers as only
licensed manufacturers and importers have access to the system.
-
On the spot seizure of illicit products and arrest of offenders
-
Reporting and business intelligence for informed interventions
-
Management and control of field officers
-
Remote and automated production accounting and monitoring
-
Illicit trade of tobacco has gone down from 15% to less than 5%