The Law Society of Kenya (LSK) has moved to Court to challenge the planned increase in excise stamp fees for various commodities.
LSK has termed the Commissioner General of the Kenya Revenue Authority’s decision unconstitutional and illegal.
It claims that the ‘illegal adjusted tax rates’ endanger the viability of the majority of makers and distributors of consumable excisable products.
KRA on January 17 this year approved the Excise Duty (Excise Products Management System) (Amendment) Regulations, 2023.
It is slated to take effect on March 1.
Beer stamps will rise from Sh1.5 to Sh3 per stamp, wines, including fortified wines, and spirits containing more than 10% alcohol would rise from Sh2.8 to Sh5.0 each stamp.
The adjustments will also affect bottled water, juices, cosmetics, tobacco and nicotine products.
LSK has requested the court to halt KRA’s enforcement of the restrictions.
“The challenged altered excise stamp rates would also widen the excise duty tax rate in the East African Community by constantly disadvantaging Kenyan producers in comparison to their African counterparts,” LSK claims.
The repercussions of KRA’s action according to the court filings will see manufacturers in Kenya continue to lose their grip on the local market through greater competition from East African Community (EAC) Partner States and expansion of illegal trade, spurred by the rising tax differentials.
