The High Court has nullified the supply, installation and maintenance of the Excisable Goods Management System (EGMS), dealing a major blow to the Kenya Revenue Authority’s (KRA) flagship track-and-trace mechanism for monitoring excisable goods.
KRA introduced the EGMS to curb tax evasion and improve accountability for products such as alcohol, cigarettes and bottled water. The system uses tamper-proof excise stamps, handheld scanners and a mobile verification app known as Soma Label, allowing both officials and consumers to confirm a product’s authenticity.
Over the years, the system expanded beyond tobacco to include alcoholic and non-alcoholic beverages, cosmetics and other excisable items. According to KRA, products monitored under EGMS have generated more than Ksh400 billion in revenue since the 2016/17 financial year.
However, the court ruled that the procurement process behind the system was unconstitutional. The court, in its judgment, found that the government had failed to ensure openness, defied procurement laws, and disregarded constitutional safeguards that rendered the entire process invalid.
Justice Bahati Mwamuye described the procurement as “irrational,” adding that it lacked key principles of public procurement, let alone the openness that should have characterized such a national project. He asserted that the defects in the process were fundamental enough to bring down the whole decision to supply, install, and maintain the EGMS.
Despite the nullification, Justice Mwamuye granted the government a 30-day stay of the judgment, which takes effect from November 27, 2025. This temporary reprieve gives the State time to assess the ruling and chart the next steps as the tax authority continues to rely on the system for revenue protection.
The EGMS currently marks products using either secure paper stamps affixed to packaging or digital stamps printed directly onto the product. These features, combined with scanning tools and the Soma Label app, allow KRA to track goods from production to the market, ensuring excise taxes are properly collected.
The court’s decision now throws the future of the system into uncertainty, raising questions about how KRA will maintain oversight of excisable products and safeguard tax revenue without a legally sound procurement framework.
The post Blow to KRA as Court Strikes Down Excisable Goods Tracking System appeared first on Bossnana.
