The Law Society of Kenya (LSK) has taken the government to court over plans to import 125,000 metric tonnes of cooking oil duty-free claiming that the decision will be detrimental to local manufacturers.
The government approved the decision last November to stabilise prices after a prolonged drought that led to a shortage of household supplies and higher food prices that affected many Kenyans.
The LSK says in the case filed at the High Court that the decision allowing Kenya National Trading Corporation (KNTC) to import the edible oil, duty-free for one year, will drive local manufacturers out of business since their products will not get the same tax treatment.
The move, according to LSK, also takes away the elements of fairness, reasonableness, neutrality, and proportionality in taxation since duty-free importation only applies to KNTC.
High Court judge John Chigiti certified the case as urgent and directed LSK to serve the court papers to the Attorney-General, PSs in the ministries of Trade, investment and Industry, the Treasury, and KNTC.
“Indeed, the respondents have not demonstrated that the country lacks edible oil or that manufacturers are unable to meet the demand for edible oil in the country,” said LSK lawyer Denis Odero.
The case will be mentioned on May 15, for directions.
The LSK pointed out that the government used the fifth schedule of the East African Community Customs Management Act to import cooking oil.
But according to LSK, the provision can only legally sanction the duty-free importation of relief goods, which are imported for emergency use in specific areas and where natural disaster or calamity had occurred in a partner state.
The lawyers’ body says edible oil or cooking fat is not relief goods and the government has not given any basis or justification as to why the duty-free importation should apply for one year.
It further says the government wrongly used the provision in a bid to avoid the constitutional requirement for procedure and scrutiny and enactment of tax exemptions through Parliament.
The LSK says the government also made the decision without consulting or involving edible oil manufacturers who have the capacity to supply the commodity at subsidised prices if they were given the opportunity.
“Given the reason behind the duty-free importation, the respondents have also ignored the provisions of the Price Control (Essential Commodities) Act of 2011 which permits the government to control or otherwise stabilise or regulate the prices of essential commodities in order to secure their availability at reasonable prices,” the LSK says.
To make it worse, the LSK says the state corporation has procured the importation of the edible oils in secrecy, without flouting any international tender or following a fair, transparent, competitive process.
