The proposed 0.05 percent tax that was to be implemented on the transfer of more than 500,000 shillings has been suspended by the High Court.
The Kenya Bankers Association (KBA) had filed a suit seeking to suspend implementation of a 0.05 percent excise duty on transactions above 500,000 shillings.
According to the bankers, they did not have sufficient information that could be used in the implementation of the “Robin Hood” tax imposed on 500,000 shillings and above transferred through banks and other financial institutions.
They had further argued that that the computer software in use by banks was not configured to support the said charges.
Judge Okwany noted that the petition raised fundamental constitutional questions, including the principle of public participation.
Judge Wilfrida Okwany has issued the directing stating that the new tax category is ambiguous
She further noted that the excise of duty transferred was an important issue that cannot be left to the interpretation by the banks.
The Bankers association had asked the court to stop implementation of the excise duty introduced by the Finance Bill 2018 until such a time that banks will alter their computer systems to capture the new excise duty.
Bankers had argued that the introduction of the new bill would negatively impact the economy and lead to erosion in investment returns between 1.0 to 5.0 percent depending on the nature of the fund and investment strategy.