KRA Uncovers Excise Stamp Theft Scheme Worth Ksh120 Million, Suspends Staff

Kenya Revenue Authority (KRA) has uncovered an internal excise stamp theft syndicate that had led to significant revenue losses, following a comprehensive audit and internal review of excise stamp records.

The investigation revealed that millions of excise stamps reported as lost in October 2024 were, in fact, unaccounted for, pointing to a well-orchestrated scheme that exploited systemic weaknesses over time. As a result of the probe, KRA has successfully recovered KSh 120,278,879 and taken firm disciplinary action against staff implicated in the matter.

“The exercise culminated in the recovery of KSh 120,278,879 and decisive action against seven members of staff implicated,” KRA said in a statement.

The findings indicate that the discrepancies were not due to a single incident but stemmed from accumulated control failures spanning several years, particularly between 2022 and 2024. One staff member has since been dismissed following the conclusion of disciplinary proceedings, while additional cases remain under review.

In line with its zero-tolerance policy on integrity breaches, KRA interdicted seven staff members to allow for thorough and independent investigations.

Further investigations traced the origins of the scheme to the transition period around 2015, when KRA migrated from a manual system to the automated Excise Goods Management System (EGMS). During this period, a joint stock-take with the system service provider revealed variances that had neither been 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.

To enhance accountability, KRA has also required corrective action from the EGMS service provider, including the replacement of its representative stationed at the excise stamp vault.

The excise sector remains a critical contributor to national revenue, accounting for 6.9 per cent of ordinary revenue collections from VAT, 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.

Beyond recovery and enforcement measures, KRA has implemented wide-ranging reforms to safeguard the integrity of excise stamp management. These include strengthening internal controls governing the receipt, storage, issuance, and reconciliation of excise stamps, as well as enhancing automation within the EGMS to enable real-time tracking and accountability.

The Authority has also institutionalised rigorous monthly stock reconciliations and audit checks, undertaken a system-wide audit to address any remaining vulnerabilities, and deepened collaboration with law enforcement agencies to support ongoing investigations and enforcement actions.

“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.

KRA reaffirms its commitment to upholding the highest standards of integrity, safeguarding public revenue, and continuously strengthening its systems to prevent fraud and enhance service delivery.