Security for Excise Duty Flashcards
What is the need for security?
for due compliance with Act
protection of excise duty revenue
mitigating risk associated with manufacture of excisable goods which duty hasn’t been paid
to secure the payment of any tax due
types of security bonds?
particular/transactional
general/bulk
form of security?
cash deposit
security bond (bank guarantee/insurance bond)
both
parties to excise security bond?
surety/guarantor
principal/obligator
obligee
when is excise security required?
manufacture of goods
storage of goods
transfer of goods between licensed premises
movement of goods for export
use of excisable goods for manufacture of non excisable goods
installation of specified devices
what is the bond management process?
bond assessment specimen signatures bond execution bond cancellation bond retirement
considerations for setting the bond amounts?
projected annual excise duty payable
risk profile of the industry
risk associated with specific transaction
what are the security amounts for manufacturers of alcoholic beverages, tobacco and tobacco products
25% of projected annual excise or KES 1250000 whichever is higher
What is the security for manufacturers other than those of tobacco and alcoholic drinks?
25% of projected annual excise or KES 125,000 whichever is higher
when can security amounts be varied?
failure to account for excise stamps
failure to remit taxes consistently within prescribed time
tax fraud
when are bonds retired?
bond expires after 3 years
performance of task is accomplished
company ceases to engage in the activity
guarantor is bankrupt/ceases operations
what are the general rules on excise security?
valid for 3 years
to be used to the favour of the principal
signed by 3 parties
are not transferable
