KRA recovers Ksh.120M in excise stamp theft scheme, suspends 7 staff members

In a statement issued on Thursday, the taxman explained that the findings from the probe were not linked to a single incident but stemmed from accumulated control failures spanning several years, particularly between 2022 and 2024.

Further investigations traced the origins of the scheme to around 2015, during the transition from a manual system to the automated Excise Goods Management System (EGMS). 

A joint stock-take conducted with the system service provider at the time revealed variances that were neither reported nor reconciled.

“Faults in manual processes created opportunities for irregularities in the receipt, custody, and issuance of excise stamps. Findings pointed to systemic lapses in reconciliation and reporting mechanisms at the time,” the Authority noted.

Following the conclusion of the proceedings, one staff member was dismissed and seven staff members were interdicted to allow for independent investigations. 

The taxman says it has since implemented reforms to safeguard the excise stamp process by strengthening internal controls on the receipt, storage, issuance and reconciliation of stamps, as well as enhancing automation within the EGMS to enable real-time tracking and accountability.

Additional measures include the institutionalisation of monthly stock reconciliations and audit checks, a system-wide audit to address remaining vulnerabilities, and enhanced collaboration with law enforcement agencies to support ongoing investigations.

“These measures are designed to close historical gaps and ensure that excise stamp management is fully secure, transparent, and aligned with global best practices,” KRA stated.

According to KRA, the excise sector accounts for 6.9 per cent of ordinary revenue collections from the Value Added Tax, excise duty, and other taxes.

In the last financial year, KRA collected Ksh.69 billion in domestic excise revenue, achieving a performance rate of 97.2 per cent.