Policy Brief No. 07 of 2020-2021 on Enhancing Effectiveness of Kenya’s Excisable Goods Management System

Abstract

Illicit trade in tobacco products presents significant public policy challenges due to health risks associated with increased access to tobacco products. Further, it contributes to loss of tax revenue and financing of organized crimes, thus calling for innovative strategies to combat its existence or spread. Kenya’s Excisable Goods Management System (EGMS) represents an example of a technology-based track and trace system that has been implemented in Kenya since November 2013. The EGMS Regulation requires all excisable goods, except motor vehicles, to be affixed with ‘intelligent’ digital excise stamps that capture product information such as manufacturer, brand, date of manufacture and date of release into the market. The stamp is in turn supported by an electronic database containing codes of all the stamps dispensed into the market and can be used to differentiate licit from illicit goods. Kenya’s EGMS has capabilities that facilitate use of digital excise stamps to verify products along the supply chain, giving the end consumers an opportunity to establish the authenticity of products through a quick response code using a smartphone application. The EGMS system has three key components: factory flow labelling and verification system; hand-held scanner that allows operators in the supply chain to verify authenticity of the product; and smartphone application that allows end consumer verify product authenticity.