What is Excise Duty

Excise duty is a tax imposed on goods and services manufactured in Kenya or imported into Kenya and specified in the first schedule of the Excise Duty Act (2015).

How do you get an Excise license?

To obtain an Excise license you initiate the process on iTax by clicking on the registration tab after you log in. Then select other registration, and click on Excise license. Fill in the details and submit. The requirements to get the licenses for importers and manufacturers are listed on the KRA website.

When are Excise Returns filed?

Excise returns are filed by 20th day of the following month. Licensed manufacturers or suppliers of excisable services are required to submit excise returns on iTax.

What is the penalty for late filing?

Late payment penalty is 5% of the amount of tax payable under the return or Ksh. 10,000, whichever is the higher.

Does water attract excise duty?

Only bottled or similarly packaged waters attract excise duty.

Is Excise duty applicable to those in water refill business?

Yes. All persons in the business of bottling (including through refilling) or packaging water are required to obtain an excise license from KRA as a prerequisite for charging and remitting excise duty. They are also required to affix excise stamps on each bottle that has been refilled or packaged.

What is an excise stamp?

An excise stamp is a type of revenue stamp affixed to some excisable goods to indicate that the required excise has been paid by the manufacturer.

Legal Notice No. 30 of 2023 titled; The Excise Duty (Excisable Goods Management System) (Amendment) Regulations, 2023 has amended, among other provisions, the the price of excise stamps effective 31st March 2023. The revised prices are as shown below;

Revision of excise stamp fees

How does one get the excise stamps?

Excise stamps are issued by KRA to licensed persons only. Applications for excise stamps are made through the EGMS system. However, a person can initiate the process at an EGMS Service Desk in the various KRA Tax Service Offices.

Quality of Excise Stamps

Any stamp quality concern shall be reported to KRA through the email- egmshelp@kra.go.ke  with relevant details. KRA has also developed a userguide on how to handle excise stamps with quality concerns. The guide includes steps on how to handle the following:

1. Stamp quality incident reporting
2. Verification of stamps with quality concern.
3. Procedure to return stamps in EGMS
4. Returning physical stamps to KRA.

Rollout of Excise Stamps on Cosmetics

Which cosmetics and beauty products require to be affixed with an excise stamp?

Every package of Cosmetics and Beauty products of tariff heading No. 3303, 3304, 3305 and 3307 imported to or manufactured in Kenya are required to be affixed with an excise stamp. Taxpayers can verify the codes from the list of goods and services listed in the First and Second schedules of the VAT Act.

Frequently Asked Questions have been developed to assist taxpayers before and during the rollout period. Public notices issued regarding the rollout date can be accessed from the media centre.

Excisable Goods Management System (EGMS)

EGMS is KRA’s Excisable Goods Management System that operates as a track and trace system used to account for excisable goods. Products are securely marked with either a secure paper  stamp which is affixed to the product or a secure digital  stamp which is printed directly on the product packaging. Since FY 2016/17, KRA has collected over Ksh 400 billion from products under #EGMS (imports & domestic). At the time of its inception, there was large scale counterfeiting of branded products. Illicit trade/counterfeiting undermines revenue collection, undercuts genuine manufacturers and poses the threat of harming society through substandard products.

Self Registration on EGMS

This is a new feature on the EGMS web application to allow taxpayers to be able to self register their company and system users into the KRA EGMS system once they obtain Excise License or Import Certificate. Upon registration, their details will be reviewed by a KRA officer and credentials automatically sent via the email provided by the taxpayer during registration. This feature is also integrated with iTax, where some primary details of the taxpayer are extracted from. You step by step process is available for download.

Manufacturers with excise licences and Importers with import certificates are required to follow a step by step guide for EGMS processes. They can create users in the EGMS system by completing the EGMS external user creation form. They are then required to stamp, scan and submit via email to KRA on egmshelp@kra.go.ke 

Ever Heard of the Soma Label App?

Soma label is a mobile application that supports EGMS. The application enables consumers to verify the authenticity of excise stamps affixed on products.