Statement on the Go live of the Excisable Goods Management System (EGMS)

In reference to the Public notice by the Kenya Revenue Authority (KRA) of the Go live of the Excisable Goods Management System (EGMS) on bottled water, juices, soda and other non-alcoholic beverages and cosmetics sector, effective 1st September 2019, KAM would like to note that;

Whilst the EGMS seeks to combat illicit trade and authenticate excisable goods, the implementation of the System 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 raising the cost of living for Kenyans.

The costs attached to EGMS range from Ksh. 0.50 to Ksh. 2.80 per unit, which are high for all manufacturers and untenable for small industries. This will impact negatively on the competitiveness of industry. Further, manufacturers do not have any control on possible increment on the excise stamp duty in future, as experienced by some sectors such as tobacco manufacturers, whose duty was increased from Ksh. 1.5 to Ksh. 2.8 per unit. This creates an unpredictable business environment that is a major disincentive for investments.

As a key pillar in the Big 4 Agenda for the country, the Manufacturing sector needs to be in a position to sustainably produce goods and services, whilst creating productive jobs for many in the country. We remain committed to realizing our country’s economic development.

Mr. Sachen Gudka,

Chairman, Kenya Association of Manufacturers