Kenya Association of Manufacturers (KAM) has come out to voice their concerns on the Excisable Goods Management System (EGMS). KAM members are not against the EGMS- they said.
Kenya Revenue Authority in may this year May won a case at the Court of Appeal, now intends to roll out the EGMS beginning tomorrow. This will also be determined by Supreme Court.
According to the manufacturers, the EGMS will have a negative impact on industry by raising operating costs and capital expenditures thereby significantly increasing the cost of doing business which ends up in raising the cost of living for Kenyans.
“Manufacturers do want to be accountable and above board on paying these taxes and the essence of implementing any system is in line with our objectives as manufacturers – the main objective was to ensure traceability and to combat illicit trade; the practicality and methodology of the proposed solution and process is problematic and threatens to deter us from the initial goal of curbing illicit trade.” A statement from the manufacturers reads in part.
A recent decision by Parliament to recommend the suspension of the EGMS system has brought forward the need for more stakeholder engagements on the implementation of the system in Kenya.
Commissioner-General, Kenya Revenue Authority John Njiraini, explains that EGMS enables production level monitoring of manufacturer operations, and field authentication of tax stamps.
“EGMS has been pivotal in sealing loopholes and delivering consistent growth in excise revenue, besides deterring the proliferation of illicit alcohol production.” He was quoted by a local daily saying.
The decision made by Parliament, gives all stakeholders time to deliberate and agree on an alternate and a cost effective solution that will achieve the main objective in terms of combating illicit trade and at the same time, create a conducive environment for industry to be competitive. We therefore call upon Kenya Revenue Authority (KRA) to delay the implementation of the EGMS until these alternatives have been fully deliberated.
“We appreciate the role of Parliament in this discussion and it is gratifying to note that the serious repercussions that this system would bring upon local industry have been deliberated. We do look forward to working together towards finding holistic and practical solutions.” Added the statement.