Excise Duty Compliance: Why It Matters for Your Business
If you're a business owner in Kenya, you're probably no stranger to the complexities of tax compliance. But excise duty compliance can be particularly tricky, and the consequences of getting it wrong can be severe. From financial penalties to operational setbacks, the risks of non-compliance can have a serious impact on your business. In this article, we'll explore the ins and outs of excise duty compliance and why it's essential to get it right. We will also tell you how Frankbridge can help you stay on top of your excise duty obligations.
What is Excise Duty, Anyway?
Excise duty is a tax levied on specific goods and services manufactured or imported into Kenya. It applies to products like alcoholic beverages, tobacco, bottled water, cosmetics, and petroleum products. If your business deals with these products, you need to understand how excise duty works and how to comply with the regulations.
The Serious Consequences of Non-Compliance with Excise Duty Regulations in Kenya
Let's face it: non-compliance can be costly. In Kenya, if you're caught out, you could face penalties of up to 5% of the tax due or KES 10,000, whichever is higher. And that's not all—you could also face delays in your business operations, damage to your reputation, and even loss of business. Trust me, you don’t want KRA on your back like that!!
How Frankbridge Advisory Ltd Can Help
At Frankbridge Advisory Limited, we're experts in excise duty compliance. We'll guide you through the process, from licensing and return filing to handling audits and disputes. Our team will help you:
Understand your excise duty obligations and how to comply
Register for an excise license and obtain the necessary permits
File your excise returns on time and accurately
Handle audits and disputes with the Kenya Revenue Authority (KRA)
Stay up-to-date with the latest changes in excise duty regulations
Our Excise Duty Compliance Services:
We offer a range of services to help you stay compliant with excise duty regulations. These include:
Excise Duty Risk Assessment
We'll review your business operations to identify areas where excise duty applies and highlight potential risks.
Many businesses unknowingly underpay or overpay excise duty, leading to unnecessary costs or compliance issues. Our team examines your transactions, products, and supply chains to ensure that you're paying the right amount while identifying opportunities to save. Whether you're dealing with alcohol, tobacco, fuel, cosmetics, or bottled water, we help you stay compliant and avoid penalties.
Excise License and Registration
We'll guide you through the process of obtaining an excise license and registering with the KRA.
Getting an excise license can be a headache if you don’t know the process. We guide manufacturers and importers through KRA’s iTax system to secure the necessary licensing without delays. We also clarify which businesses need excise licenses and help with renewals to ensure you remain compliant year-round.
Monthly Excise Returns and Compliance
We'll prepare and submit your excise returns on time, ensuring you stay compliant and avoid penalties.
Excise duty returns are due on the 20th of every month, and failing to file on time comes with penalties. We take this burden off your plate by preparing and submitting your returns accurately and on time. Whether you need help calculating tax, reconciling payments, or understanding how to report excisable goods, we ensure you stay in good standing with KRA.
Tax Breaks and Exemptions Advice
We'll analyse your business model to determine if you qualify for lower tax rates or full exemptions.
Not all businesses need to pay full excise duty—some qualify for incentives, exemptions, or special tax reliefs under the Excise Duty Act, 2015. We analyse your business model to determine if you qualify for lower tax rates or full exemptions. If you’re eligible, we handle the paperwork and engage with KRA on your behalf, so you can take advantage of these savings without the hassle.
Excise Tax Training
Excise duty laws change often, and businesses get caught off guard by new requirements. We offer hands-on training to equip your team with the knowledge they need to manage excise tax correctly. Whether it’s understanding how to apply excise stamps, filing returns, or dealing with audits, we break it down in a practical and easy-to-understand way.
KRA Audit Support and Tax Dispute Resolution
We'll represent you in audits and disputes, ensuring your rights are protected and minimising financial exposure.
If KRA flags your business for an audit, things can get complicated fast. We step in to represent you, ensuring your rights are protected while working to resolve issues smoothly. Whether it’s handling a tax tribunal case or negotiating through Alternative Dispute Resolution (ADR), we help you push back against unfair tax assessments and minimise financial exposure.
Excise Tax in Contracts
We'll review your contracts to ensure excise duty costs are factored in, preventing unexpected tax liabilities.
Many businesses overlook excise duty when signing supplier and distributor contracts, only to realise later that they owe more tax than expected. We review your agreements before you sign, ensuring that excise duty costs are factored in correctly. This helps you avoid disputes, unexpected tax liabilities, and compliance issues down the line.
Legislative Updates
Excise duty regulations change frequently, affecting businesses in alcohol, tobacco, financial services, cosmetics, bottled water, and other excisable sectors. Stay ahead of tax changes to maintain compliance and avoid unexpected tax liabilities. At Frankbridge, weprovide timely updates on:
Changes in the tax laws and exemptions
New compliance requirements
Key updates from the Kenya Revenue Authority (KRA), National Treasury, and Parliament
Insights on disputes that have been decided in the courts and tax tribunal and policy changes affecting businesses
Stay ahead of tax changes. Sign up for Excise Duty Updates to receive the latest policy changes straight to your inbox.
Why Choose Frankbridge Advisory Limited?
By working with us, you'll benefit from:
Expert guidance: Our team has years of experience in excise duty compliance and will guide you through the process.
Timely updates: We'll keep you informed of the latest changes in excise duty regulations, ensuring you stay compliant.
Personalised support: We'll work closely with you to understand your business needs and provide tailored support.
Get in Touch
Don't let excise duty compliance give you headaches!
Contact us today to learn more about our services and how we can help you stay compliant.
Frequently Asked Questions on Excise Duty in Kenya
Who needs professional assistance with excise duty compliance?
Businesses involved in manufacturing, importing, or supplying excisable goods or services—such as alcohol, soft drinks, bottled water, tobacco, cosmetics, and petroleum—must comply with excise duty regulations. If you’re unsure about your obligations, Frankbridge Advisory Limited can guide you through registration, filing, and compliance.
How can I obtain an excise license in Kenya?
What are the penalties for non-compliance with excise duty regulations?
Noncompliance may result in:
- Penalties for late filing (5% of tax due or KES 10,000, whichever is higher).
- Seizure of non-compliant goods.
- Business closure or revocation of licenses.
Our team at Frankbridge Advisory Limited ensures that your excise filings are always up to date, preventing costly penalties.
How do I register for the Excisable Goods Management System (EGMS)?
Can I claim refunds on excise duty, and how does the process work?
How do I manage excise stamps for my products?
Do small-scale water refill businesses need an excise license?
What should I do if I receive an excise duty compliance notice from KRA?
How often do excise duty regulations change, and how can I stay updated?
How can I get started with excise duty compliance services?