KRA sets sights on brewers installing CCTVs in fresh tax evasion crackdown

Economy

KRA sets sights on brewers installing CCTVs in fresh tax evasion crackdown


kra

Times Tower in Nairobi, the headquarters of Kenya Revenue Authority (KRA). Picture taken on Thursday, October 15, 2020. PHOTO | DENNIS ONSONGO | NMG

BDgeneric_logo

Summary

  • The mass custody flow meter will track high volumes of alcoholic beverages produced to maximize the excise tax collected.
  • CCTV cameras will also allow the taxman to track what the firms are producing, by relaying data in real-time.
  • The metering device was initially set for spirituous liquors in 2011 such as whiskey, brandy, and gin, but is now set to be introduced to the entire alcoholic beverages industry.

The taxman is set to enforce installations of flow meters and CCTV cameras in alcoholic factories, in a move to curb tax evasion and increase revenue collection.

The mass custody flow meter will track high volumes of alcoholic beverages produced to maximize the excise tax collected.

CCTV cameras will also allow the taxman to track what the firms are producing, by relaying data in real-time.

The metering device was initially set for spirituous liquors in 2011 such as whiskey, brandy, and gin, but is now set to be introduced to the entire alcoholic beverages industry including beer and gradually to other excisable products like water.

” This year we, have come up with a very aggressive way of ensuring all manufacturers of alcohol are fitted with three key gadgets including, a mass custody flow meter, a radar to monitor what is entering into their tanks, and CCTV cameras. All these gadgets will be integrated and ensure they can relay data remotely, ” said Isaac Gachoka, a Kenya Revenue Authority (KRA) domestic tax enforcement official.

The installation of meters was expected to start in October 2011.

Despite gazetting the law, over 40 companies manufacturing spirits are yet to comply, due to the high cost of the meters. Two units are currently selling for Sh8 million.

“In due time, the remote process will remove elements of human interaction and allow technology to deal with any activities that will be happening in those places.”

The technology is expected to complement the existing Excisable Goods Management System (EGMS) that facilitates tracking stamps on excisable goods along the supply chain to account for payment of taxes.

KRA began ordering manufacturers and importers of excisable goods to affix traceable EGMS stamps on their products in 2013.

The digital stamps were meant to replace paper stamps but are also prone to counterfeiting.

The latest move comes amid a tussle between the taxman and Keroche Breweries where the firm is accused of failing to pay Sh22.79 billion in various taxes over 16 years.

Kenya is said to lose more than Sh153 billion tax revenue annually to illicit trade, with alcohol products and tobacco among the most illegally sold products.

[email protected]

.

Leave a Comment