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KRA calls for stakeholder talks on proposed stamp rate hike on cosmetics
The Kenya Revenue Authority has called for a virtual stakeholder engagement with manufacturers, importers and other stakeholders involved in distributing and supplying cosmetics and beauty products on May 3.
KRA seeks to increase the cost of excise stamps on cosmetics and beauty products from KES 0.60 to KES 2.50 apart of its measures to increase revenue collection.
The taxman intends to roll out the excise stamps duty from July 1.
Manufacturers have previously faulted the proposed hike in excise stamps rates of various products with KAM Chairman Rajan Shah saying “the proposed drastic increase in the cost of stamps seeks to be a revenue collection mechanism as opposed to an assurance tool.”
He said, “Meaningful consultative engagements, competitive bidding of suppliers and Joint Impact Assessment with the industry need to be conducted to ensure the country remains competitive.”
“We are afraid that such an increment to some of the most counterfeited items in Kenya will further encourage counterfeit and illicit trade. This will deny government revenue and put the lives of Kenyans at risk as substandard and highly dangerous goods infiltrate the market,” he added.
KAM urged the government to retain the current charges on the excise stamps and to finalise and implement the National Tax Policy, focusing on enhancing certainty and predictability in the tax code.
“Predictability earns investor confidence in the country, leading to increased local and foreign investments. Sudden changes in fiscal policy and regulations divert industry’s resource allocation from productivity into meeting the costs associated with changes towards fast compliance,” he said.
The increase in stamp prices would likely be passed down to consumers by producers and importers, similar to other excise charges, and is expected to bring in extra billions for the Treasury.
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