- KRA on January 17 enacted the Excise Duty (Excise Goods Management System) (Amendment) Regulations, 2023.
- It's to take effect on March 1.
The High Court will be hearing a case in which The Law Society of Kenya is challenging the proposed hike in excise stamps for various products.
LSK has termed the decision by the Commissioner General, Kenya Revenue Authority as unconstitutional and unlawful.
It says the 'illegal adjusted tax rates' threaten the survival of the majority of manufacturers and distributors of consumable excisable goods.
KRA on January 17 enacted the Excise Duty (Excise Goods Management System) (Amendment) Regulations, 2023.
It's to take effect on March 1.
The adjustment will increase the stamps of Beer from Sh1.5 to Sh3 per stamp. Wines including fortified ones, and spirits exceeding 10 per cent from Sh2.8 to Sh5.0 per stamp.
The adjustments will also affect bottled water, juices, cosmetics, tobacco and nicotine products.
LSK has asked the court to stop KRA from enforcing the regulations.
"The impugned adjusted rates of excise stamp will also widen the excise duty tax rate in the East African Community by continuously disadvantaging the manufacturers in Kenya against their African Counterparts," LSK said.
The implications of KRA's move according to the court documents will see manufacturers in Kenya continue to loosen their grip on the domestic market through increased competition from East African Community Partner States and the growth of illicit trade, fueled by the increasing tax differentials.
The case was brought before High court judge Hedwig Ong'undi.
She directed the application be served on KRA and the Attorney General's office ahead of the mentioned date today (Friday) for directions.
In a separate matter, the son of the late Kiambu prominent businessman David Ndua Thuo has lost a bid to stop his stepmother from selling Sh5 billion property to investors after the High court dismissed his case on lack of merit.
Godfrey Hinga had urged the court to cancel all the sales and developments going on in the family's property known as Wamikey Estate Limited.