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KRA targets e-cigarettes, sheesha in new excise duty plan

By For Citizen Digital

KRA targets e-cigarettes, sheesha in new excise duty plan

Manufacturers and importers of tobacco products in Kenya will be required to affix excise duty stamps on their products as the government rolls out a system to broaden tax compliance.

The Kenya Revenue Authority (KRA) expects all tobacco manufacturers and importers to have the excise duty stickers displayed on the products.

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The country has witnessed a proliferation of tobacco products apart from cigarettes with most of the vendors failing to pay taxes.

Under the directive, retailers and restaurants will also display health warnings of the products.

“KRA wishes to inform all manufactures, importers, distributors. Retailers, restaurants or other retail outlets that all tobacco products packaged for retail must bear excise stamps and appropriate health warnings signage as required under the applicable regulatory laws,” KRA said in a public notice.

In the new directive, manufactures and importers dealing with electronic cigarettes and cartridges, cigars, chewing tobacco, sheesha, cigarillos as well as any tobacco substitute will need to apply for excise stamps to affix on their products.

“Manufactures and importers are advised to register with KRA as required under section 15 of the excise duty act 2015 and regulation 7 registration, the persons shall apply for excise stamps from KRA to affix on these packages,” the taxman said.

While the taxman contends that the excise duty stickers are designed to fight trade in illicit goods, protect the public from unregulated products and boost tax revenue, there are concerns it could trigger price increases as manufacturers pass on the cost to consumers.

KRA plans use the excise stamp to deter counterfeiting, facilitate tracking of the stamps and excisable goods, and enable accounting for the production of excisable manufactured or imported goods.

Last month KRA announced that all manufactures of non alcoholic beverages will be required to affix excise duty stamps on their products as part of plans to broaden tax compliance.

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