KRA chief John Njiraini under pressure to resign over bottled drinks tax

KRA chief John Njiraini under pressure to resign over bottled drinks tax

- in Business, News
KRA Commissioner General John Njiraini. PHOTO: COURTESY

Cherangany MP Joshua Kutuny has asked Treasury CS Henry Rotich to sack KRA chief John Njiraini for ignoring Parliament’s directive to stop imposition of excise stamps on soft drinks.

Njiraini serves Kenya Revenue Authority as Commissioner General.

Kutuny explained on Monday that Parliament ordered KRA to stop implementing the  Excisable Goods Management System until a forensic audit report by the Auditor General is concluded.

The EGMS e-tax service was single-sourced from Swiss firm, SICPA Security Solution SA Limited, at Sh17.7 billion.

Kutuny said the system, whose roll-out is expected next week, should be put on hold until the National Assembly’s Public Investment Committee concludes investigations into the sourcing of SICPA.

“Treasury should confirm that the tender award to SCIPA was executed in strict compliance with provisions of the Public Procurement and Disposal Act. Members of the Tender Committee should be investigated for single-sourcing SICPA andaction taken,” he said.

He added that the system should be suspended until a case at the Supreme Court is heard and determined.

The MP further called for a full breakdown of the amount of money the Swiss firm will generate from the contract and whether it will be sent to Switzerland or channeled to KRA as taxes.

The PIC,  which is chaired by Mvita MP Abdulswamad Nassir, is investigating the award of the Sh1.50 per stamp tender which manufacturers of water, soda and fruit juices have opposed.

Kutuny said the average number of bottles of soft drinks is 30 million per day so the SICPA collect approximately Sh54 million if the Sh1.50 cost per stamp is imposed.

“This means that in a month, the SICPA will mint Sh1.2 billion and a total of Sh16 billion in a year. With a contract running for five years, SICPA will reap  Sh81 billion in a tender originally negotiated for Sh17 billion. This is a monumental reap-off,” he told a press conference at Parliament Buildings.

“Manufactures are being forced to install this expensive system at their own costs when what is needed is simple reconfiguration on production lines to give KRA what they want.”

If the new system is not suspended, bottled water, juices, soda and other non-alcoholic beverages and cosmetics will be affixed with excise stamps. This is whether they are imported or manufactured locally.

The excise duty stamps were rolled out in 2013 and were initially focused on tobacco products, wines and spirits.

The taxman has extended enforcement to other alcoholic beverages and non-alcoholic and bottled drinks, to rid the market of counterfeit products.

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