Press Release: Court of Appeal Permits KRA to Execute EGMS to Eliminate Illicit Trade
The Kenya Revenue Authority (KRA) on Friday received “a Stay of the Judgement in the Nairobi High Court Petition No 532 of 2017: Okiya Omtatah Okoiti versus KRA, the Cabinet Secretary, the National Treasury, and SICPA, pending the hearing and determination of KRA’s appeal.” This enables the Authority to carry on with the application of the Excise Goods Management System (EGMS) on non-alcoholic beverages.
Judges Asike Makhandia, Fatuma Sichale, and Kathurima I’minoti at the Court of Appeal put on hold the High Court ruling made on 12 March that had stopped the EGMS implementation.
KRA went to court requesting a stay of the ruling pending the hearing and determination of the appeal. The Authority is now free to apply the EGMS even as the appeal waits for the hearing.
Justice John Mativo had previously rejected and stopped the implementation of EGMS on soft drinks and water on the basis that the law allowing for the application of EGMS was unconstitutional and failed to support public participation. The ruling also rejected KRA’s contract with SICPA. SICPA is a global leader in security inks for currencies and sensitive documents.
The stay given by the Court of Appeal judges gives KRA the permission to implement EGMS on imported bottled water and other non-alcoholic drinks.
EGMS prohibits tax evasion in the beverage manufacturing sector by sticking stamps on bottles to trace them from production to consumption.
The application of EGMS could boost tax revenues to Sh27.68 billion in the financial year 2017/2018. Therefore, the ruling has played a big part in eliminating illegal trade.
“KRA remains steadfast in the fight against production and sale of counterfeit and illicit products, which have been on the rise,” the Authority says in a statement.