KRA to raise Sh1.6bn from soda, water tax

The taxman expects to collect between Sh1.6 billion and Sh2 billion from bottled water and soda taxes by the time the financial calendar ends.

However, the delayed rollout of the excise tax management system for bottled water, soda and juices will see the State forego more than Sh1.6 billion, even though as the taxman expressed confidence in the implementation.

The KRA had earlier set an annual target of Sh3.6 billion.

The system went live on November 13 despite protests from sections of manufacturers amidst a legal dispute.

“We lost half the year,” KRA deputy commissioner in charge of policy and domestic taxes Caxton Masudi told the Business Daily in an exclusive interview.

“We are expecting around Sh1.6 billion to Sh2 billion, taking note that enforcement will start at the end of January.”

The system requires manufacturers to affix new generation excise stamps on bottled water, juices, soda, energy drinks, non-alcoholic beverages, food supplements and cosmetics.

According to Mr Masudi about 175 companies producing bottled water and juices have so far registered in the Excisable Goods Management System. This means the firms have installed an automated stamp-fixing system and are making real-time data transmission to the KRA.

The taxman intended to have about 400 companies, Mr Masudi said.

The KRA has deployed 80 personnel to help manufacturers with teething problems ahead of the January 31 deadline to effectively enforce the tax regime, the official said.

He revealed that the cosmetics industry had been spared the implementation of the new tax system, pending resolution of system hitches and discussions with sector players.