For the longest time, Kenya Revenue Authority has been blamed by manufacturers for failure to properly coordinate implementation of legal requirements which has for the longest time closed out manufacturers on excise tax licenses therefore prohibiting them from manufacturing and selling local goods.
Manufacturers without proper licensing were also barred from distributing their goods in retail shops across the country which would in return deny the taxman revenue and in the same breathe cause huge losses. This as well prompted to retailers threatening to pull down these manufacturers’ goods to steer clear of law breakage.
Following these back and forth between the parties, Kenya Revenue Authority and Kenya Association Manufacturers recently had a meeting in respect to the ongoing licensing of manufacturers and importers of excisable goods under the Authority’s stakeholder engagement programme.
The meeting which attracted leadership teams from both sides was held at KRA Headquarters, Times Tower and addressed challenges cited by manufactures and importers in licensing of excisable goods and explored areas of cooperation.
Following the meeting, KRA and KAM jointly agreed that:
- All manufacturers and importers of excisable goods that are experiencing difficulties in complying with KRA’s requirements due to reasons beyond their control should write to KRA and clearly highlight the challenges and where applicable, attach supporting evidence.
- KRA, through an internal committee will review all appeals from the different companies within the sectors and issue them with letters allowing them to continue operating and also enable them sell goods that were manufactured prior to the public notice issued by KRA on 24th July that listed companies licensed to transact in excisable goods.
- KRA will continue to issue licences to companies that present the relevant documents and will publish an updated list within a week.
- KRA and KAM will review the requirement for traders to produce a letter from the county government as evidence that a factory is located in a designated area.
- KRA and KAM will continue to engage through different platforms to strengthen their cooperation in getting mutually beneficial solutions to some of the challenges facing the industry.
- KRA reassured KAM that the Authority operates within a statutory mandate and that Excise Duty is payable pursuant to the provisions of the fifth schedule to the Customs and Excise Act Cap472 of the Laws of Kenya.
- KRA also highlighted that pursuant to Section 90 and Section 116B of the Customs and Excise Act, CAP 472 of the Laws of Kenya, it is an offence under Section 185(1) (d) (iii) of the Act to be in possession, purchase or consume excisable goods manufactured or imported or sold by unlicensed persons.