Government and Policy

You Won’t Double Excise Duty For Kenyans – Court To KRA

BY Juma · May 17, 2023 10:05 am

KEY POINTS

In April, the Kenya Association of Manufacturers protested the gazettement and implementation of the Legal Notice No. 30 of 2023 titled: The Excise Duty (Excise Goods Management System) (Amendment) regulations 2023.

KEY TAKEAWAYS

“We are afraid that such an increment to some of the most counterfeited items in Kenya will further encourage counterfeit and illicit trade. This will deny government revenue and put the lives of Kenyans at risk as substandard and highly dangerous goods infiltrate the market."

The court has temporarily stopped the Kenya Revenue Authority (KRA) from doubling the excise duty stamps on beer, bottled water, and cosmetics. The ruling gives a temporary reprieve to manufacturers who were set to feel the pinch of high taxes.

The Law Society of Kenta had challenged the amendment arguing that the regulations were not subjected to public participation as required by law. It appeared that Kenya Revenue Authority did not consider any views from Kenyans and stakeholders.

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“In this matter, I am persuaded that the public interest outweighs the respondents’ mandate and tilts in favor of the petitioner. Therefore, putting the above in mind, I am satisfied that the principles of granting conservatory orders sought in this matter have been satisfied as will aid in meeting the ends of justice,” said the judge during the ruling.

The Amendment effectively increases the rates of excise stamp fees for bottled water, juices, and any other non-alcoholic drinks, cosmetics, alcoholic beverages, tobacco, and nicotine products, and export products.

KAM and other business associations attended a public participation forum convened by Kenya Revenue Authority (KRA) and The National Treasury on the above subject matter on 1st February 2023.

During this engagement, the stakeholders present unanimously objected to the proposal published to increase the cost of EGMS stamps for the above-listed products.

Subsequently, this will lead to reduced government revenue. The increment will result in low sales and in turn, have a negative effect on other revenue streams from manufacturers such as VAT, PAYE, and Income Tax among others. The ripple effects will be a downside from job creation to job losses and affect many livelihoods,” said KAM.

About Juma

Juma is an enthusiastic journalist who believes that journalism has power to change the world either negatively or positively depending on how one uses it.(020) 528 0222 or Email: info@sokodirectory.com