MPs back Executive to fight lawsuit against stamp taxes
The National Assembly has opened public participation for two bills which form part of the conditions attached to the Sh139 billion soft loan secured from the World Bank. FILE PHOTO | JEFF ANGOTE | NMG
Kenyan MPs have joined the executive to fight a case by the Law Society of Kenya seeking to stop the increase of taxes on alcohol, juices, cosmetics and cigarettes.
This is after the National Assembly on Monday joined the Attorney-General and Kenya Revenue Authority (KRA) in a fight filed by the Law Society of Kenya seeking to stop the government from hiking excise stamp costs on various products.
Appearing before Justice Hedwig Ong'undi on Monday at the High Court in Milimani Nairobi, the National Assembly joined the government's side to dismiss the suit filed by LSK.
LSK wants the court to suspend the KRA from enforcing the proposed regulations -Excise Duty (Excise Goods Management System) (Amendment) Regulations, 2023 -whose impact is to adjust and raise the price of excise stamps of the products by up to four times.
The KRA’s proposed regulations seek to increase the fees of excise stamps for bottled water, juices and any other non-alcoholic drinks, cosmetics, alcoholic beverages, tobacco and nicotine products and export products subject to excise with effect from March 1, 2023.
But the National Assembly opposed granting of the orders sought by LSK saying the lawyers' lobby group moved to court prematurely.
Through lawyer Mitchele Omuom, the National Assembly said the regulations are currently undergoing the public participation process.
"The matter is yet to reach National Assembly, which is seeking public views. Claims by LSK are speculative and should not be granted at this stage. The orders sought are final in nature," said Ms Omuom.
For his part, the Commissioner-General of KRA through lawyer Ochieng Gaya said LSK moved to court prematurely because the regulations had not been gazetted.
He explained that the purpose of the draft regulations is to ensure the cost of production of excise stamps is met by the producers and not KRA.
The AG, through state counsel Wanjiku Mwangi, also pressed for the dismissal of the suit asking the court to exercise restraint by declining to suspend the regulations.
"Allow Kenyans to interact with the regulations and decide later. LSK can come to court later when regulations get adopted. Kenyans should be allowed to air their views and decide if they want to be taxed in the proposed manner," said Ms Mwangi.
The LSK, through its president Eric Theuri, told the court that Kenyans are at threat of purchasing products at hiked prices and flooding of illicit goods in the market if KRA is allowed to implement the proposed regulations.
"No refund mechanism for consumers and manufacturers will lose share of the market to illicit products. Come March 1, the amendment will take effect and the petition will be rendered nought. Allow the prayers in the application," said Mr Theuri.
In the application, LSK said 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 per stamp.
Justice Ong'undi will rule on the application on Tuesday at 4pm.
