Kenyans are set for tough times ahead following the move by the taxman to impose Excisable Goods Management System (EGMS) stamp that will increase water prices by up to Ksh. 100 per 20m litre refil
The Water Bottlers Association of Kenya (WBAK) pointed out that the price of bottled water is expected to increase by an average Ksh.7 per litre as the Kenya Revenue Authority (KRA) moves to implement new excise taxes on the non-alcoholic beverage from Wednesday next week.
WBAK chairperson Henry Kabogo said the new excise tax will lead to the retail cost of a 20 liter water container retailing at between Sh250 and Sh350 to between Sh450 and Sh550.
Mr Kabogo said some water bottling firms may not cope with higher production costs and maybe compelled to shut down if the new system is implemented. The association is consequently seeking concessions from the taxman in the implementation of additional excise stamps targeting drinking water and other beverages.
New excise taxes on the non-alcoholic beverages were first introduced in the Excise Duty Bill, 2015.
During the weekend the Kenya Revenue Authority (KRA) postponed the roll-out of the Excisable Goods Management System (EGMS) that would have seen manufacturers from September 1 required to affix the new generation excise stamps on bottled water, juices, soda, energy drinks, non-alcoholic beverages, food supplements and cosmetics.
The KRA had said extending use of excise stamps to the non-alcoholic sector was mainly informed by the need to address unregulated products and enhancing revenues.
The KRA had earlier said it expects to collect an additional Sh3.6 billion after the introduction of new excise stamps.
The water bottler welcomed the postponement, saying the taxman should consult.
“We welcome postponement of the EGMS rollout to a date we do not know. We want to believe all stakeholders will be called in order to discuss rollout when all of us are ready,” said Mr Kabogo.
“This will help the industry as well as prepare consumers of the impending changes in increase in price and what is expected of them in terms of what to look for in products.”