The Kenya Association of Manufacturers (KAM) has come forth to tell the Kenya Revenue Authority (KRA) that their implementation of the Excisable Goods Management System (EGMS) will have a negative impact on the industry.
According to KAM, the go-live of the EGMS will raise 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 0.50 shillings to 2.80 shillings per unit, which are high for all manufacturers and untenable for small industries.
This will impact negatively on the competitiveness of the 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 1.5 shillings 2.8 shillings per unit. This creates an unpredictable business environment that is a major disincentive for investments.
As a key pillar in the Big Four 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,” read the notice From the Keya Manufacturers Association.
The Kenya Revenue Authority had previously given notice on the go-live of EGMS on bottled water, other non-alcoholic drinks, and cosmetics that will kick off starting September 1.
Through the Excisable Goods Management System (EGMS), the authority said it seeks to raise an additional 3.6 billion shillings and to combat illicit trade and authenticate excisable goods.