Kenya Revenue Authority (KRA) has uncovered an internal scheme involving the loss and mismanagement of excise stamps.
This discovery followed a comprehensive audit and internal review that revealed millions of stamps not accounted for.
The audit identified a well-organized operation that exploited systemic gaps for several years, leading to disciplinary action and recovery efforts by the Authority.
The excise stamp sector is a critical component of Kenya’s revenue framework, contributing 6.9% of ordinary revenue collections from VAT, excise duty, and other taxes. In the 2025 financial year, KRA collected KSh 69 billion in domestic excise revenue.
Audit Uncovers 120 Million Theft and Years of Irregularities
According to KRA, the discrepancies were not the result of a single failure but stemmed from accumulated failures in control mechanisms, particularly between 2022 and 2024.
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The audit established that the excise stamps declared missing in October 2024 were not properly accounted for.
As part of the disciplinary action, the authority has dismissed one staff member following the conclusion of internal investigations, while additional cases remain under review.
The Authority has also suspended seven employees to pave the way for further investigations.
“The exercise culminated in the recovery of KSh 120,278,879 and decisive action against seven members of staff implicated,” stated KRA.
KRA System Transition Linked to Control Gaps
Investigations further traced the origins of the discrepancies to the transition period around 2015, when KRA moved from manual processes to the automated Excise Goods Management System (EGMS).
During the shift, a joint stock-taking exercise with the system service provider 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.
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Reforms Introduced to Tighten Controls
KRA has reaffirmed its commitment to upholding the highest standards of integrity to safeguard public revenue and continuously strengthening its systems to prevent fraud and enhance service delivery.
“These measures are designed to close historical gaps and ensure that excise stamp management is fully secure, transparent, and aligned with global best practices,” the statement read.
To address the issues, the authority has directed the EGMS service provider to implement corrective measures, including replacing its representative stationed at the excise stamp vault.
KRA has facilitated measures, including:
- Institutionalized monthly stock reconciliations and audit checks,
- Conducted a system-wide review to identify and seal remaining vulnerabilities
- Enhanced collaboration with law enforcement agencies to support ongoing investigations
