Taxman banks on mobile verification in fake stamps war

Times Tower in Nairobi, the headquarters of Kenya Revenue Authority. PHOTO | DENNIS ONSONGO | NMG

The Kenya Revenue Authority (KRA) has urged consumers to verify the validity of excise duty stamps on products using smartphones, as the taxman seeks to discourage the use of fakes that deny it billions of shillings in revenue.

The taxman has launched a new mobile phone app dubbed Soma Label that will scan and verify the new generation excise stamps it unveiled recently, targeting counterfeit products such as wines, spirits and tobacco products.

The upgraded excise stamps have a quick response code (QR code) for distributors, retailers and consumers using the app to verify the authenticity of the products.

The new stamps are part of the KRA’s wider scheme to ride on electronic goods management system (EGMS) to combat illicit trade, seal revenue leakages and boost collection.

“The rollout will be implemented in three phases with the first one targeting wines, spirits, ready-to-drink beverages, beer and other tobacco products,” said KRA in a statement yesterday. “Water, soft drinks and juices will have the new stamps from 28th December 2021, whereas tobacco products and keg beer will be covered from February 1, 2022.”

The new excise stamps replace the current batch introduced about five years ago.

The taxman, however, said that the old generation paper stamps affixed on wines, cigarettes, beers and spirits will continue to be in use for one month after the dates of the rollout.

In the last financial year, the KRA collected Sh216.3 billion in excise taxes and is targeting Sh259.6 billion in the current fiscal year. Over the last five years, the taxman estimates it has lost about Sh70.3 billion from excise tax evasion.

Alcohol and cigarettes are the largest contributors to the excise duty receipts, accounting for more than three-quarters of the collections.

The KRA, for example, now charges an excise duty of Sh278.80 per litre of spirit, Sh208.20 for a litre of wine, and Sh121.85 for beer, while smokers pay Sh3.48 per stick of cigarette with a filter.

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