This follows the dismissal of KRA’s application by the Court of Appeal saying it was premature and meant to derail a petition that was yet to be concluded.
High Court judge James Makau had issued temporary orders in October, barring KRA from increasing excise duty on the products by 4.97 percent in line with average annual inflation.
Kenya Revenue Authority (KRA) has lost a bid to suspend a ruling of the High Court that halted the increase of excise duty on petroleum products.
This follows the dismissal of KRA’s application by the Court of Appeal saying it was premature and meant to derail a petition that was yet to be concluded.
High Court judge James Makau had issued temporary orders in October, barring KRA from increasing excise duty on the products by 4.97 percent in line with average annual inflation.
The taxman then moved to the Appellate court arguing that it was losing millions in tax, which may never be recovered in case the appeal succeeds.
But Justices Asike Makhandia, Jamila Mohammed and Imaana Laibuta said the proceedings by KRA will only delay the petition pending before the High Court.
“In our considered view, the applicant’s motion is premature and unprocedural. The orders sought, and the reasons advanced by learned counsel for the applicant are precisely the matters that await determination at the inter-partes hearing of the respondents’ motion and petition in the High Court,” the Judges said.
In the case, two Kenyans had petitioned court to stop the impending decision by the taxman to increase excise duty, arguing it would put pressure on the cost of living.
Mr Isaiah Odando and Mr Wilson Yata had sought an order quashing the adjustment, which was to come into effect on October 1.
It was their argument that Parliament has failed to cushion Kenyans against the spiraling effect of fuel tax by deliberately sanctioning taxes on petroleum products, which currently constitute more than half of the price.
They also sought an order directing the government to come up with clear regulations on the management and application of moneys received by the Petroleum Subsidy Fund from the Petroleum Development and for KRA to account for moneys received from the Petroleum Development Levy.
Justice Makau granted the temporary orders saying the petitioners have a strong case with the likelihood of success. The Judge said if KRA adjusts the excise duty rates as proposed, Kenyans would be exposed to danger.
The excise duty adjustment is in line with the law that demands that it be revised upwards in tandem with the cost of living measure or the average rate of inflation in the 12 months through June.
KRA is for the first time required to get parliamentary approval to effect the new rates following changes to the law that came into effect last year.
