High Court halts 25pc excise duty on imported furniture

The High Court has temporarily suspended the imposition of 25 percent excise duty on all imported furniture following a petition that argues that the Bill was passed without adequate public participation.

The Excise Duty (Amendment) Bill was among laws passed through the Finance Act and which introduced 25 percent excise duty on imported furniture in a bid to protect the local industry.

Justice Anthony Mrima Monday froze the implementation of the excise duty in the law signed by President Uhuru Kenyatta on June 30.

“The imposition of the 25 percent excise duty on imported furniture in the Finance Act, 2021 is hereby suspended pending the interparties hearing,” said the judge

“At the risk of ruining Kenya’s international relations and further burdening the taxpayer, is the imposition of the impugned excise duty. These are some of the issues which needs a close scrutiny by the court.”

Activist Okiya Omtatah argued that the bill was introduced on the floor of the House, after it was rejected by the committee on Finance and National planning as well as Treasury.

He says the committee gave reasons for rejecting the proposal but it was reintroduced during the third reading.

Justice Mrima noted that Treasury did not support the amendment Bill because imported furniture was already attracting import duty at the rate of 35 per cent and VAT of 16 percent, a move aimed at protecting local furniture producers.

The court also noted that previous efforts to protect local industry by imposing excise duty has been challenged before the East Africa Court of Justice.

The court cited the imposition of 25 percent excise duty on glass bottles, which the EACJ found it to be discriminatory against glass bottles coming from other EAC countries.

Attorney General opposed the case, arguing that the taxation is for the benefit of all Kenyans and Mr Omtatah had not shown how he will suffer if the duty was not suspended.

The AG further said Parliament is the only institution invested with the sole mandate to make laws including the passage of bills.