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The Kenya Revenue Authority (KRA) has been granted a Stay of the Judgement, in Nairobi High Court Petition No. 532 of 2017: Okiya Omtatah Okoiti – Versus – Kenya Revenue Authority, the Cabinet Secretary – The National Treasury and SICPA, pending the hearing and determination of the Authority’s Appeal. This allows the Authority to proceed with the implementation of the Excise Goods Management System (EGMS) on non-alcoholic beverages.
Judges Asike Makhandia, Kathurima I’minoti and Fatuma Sichale at the Court of Appeal, put on hold the entire 12th March, High Court ruling that had quashed implementation of EGMS.
KRA moved to Court seeking a stay of the ruling pending the hearing and determination of an appeal. KRA is now at liberty to implement EGMS even as the appeal awaits hearing.
Orders previously delivered by Justice John Mativo in the High Court, had quashed and stopped the implementation of EGMS on soft drinks and water, on grounds that the law that brought EGMS into place was unconstitutional and did not favour public participation. KRA’s contract with SICPA was also quashed.
The stay by Judges Makhandia, I’minoti and Sichale allows KRA to go ahead and apply EGMS on imported bottled water and other non- alcoholic drinks.
The electronic tax system seals tax evasion loopholes in the beverage manufacturing industry by affixing stamps on bottles to trace them from production to consumption.
The implementation of the tax stamp has a potential of bringing in KSh27.68 billion in tax revenues in the financial year 2017/18. The ruling is a huge win towards the fight against illicit trade.
KRA remains steadfast in the fight against production and sale of counterfeit and illicit products, which have been on the rise.