Beverage, cosmetic firms sue Treasury CS, taxman

Soda, bottled water, juices, non-alcoholic beverages and cosmetic companies have gone to court to protest a new tax system set to start in September that is expected to help the Kenya Revenue Authority (KRA) net Sh3.6 billion more revenue.

Nuteez Peanut Butter maker Jetlak Foods Limited, food processor Delmonte, PZ Cussons EA Ltd, Blue Plastics & Water Co ltd, Aviano Ltd, Kenafric Industries, juice manufacturer Kevian Kenya, Buyline industries, Nivea products maker Beiersdiorf Eastafrica, L’oreal and Kenya Tea Packers Ltd (Ketepa) have sued the State as members of the Association of Manufacturers, importers, distributors and retailers.

They have sued the National Treasury Cabinet Secretary, KRA and the Attorney General while claiming that rollout of the Excisable Goods Management System (EGMS) tax system on their products lacked consultation as well as legal basis.

Through lawyer Kelvin Mogeni, they claim that the new tax measures set to be imposed by KRA would unnecessarily inconvenience consumers.

In this regard, the companies have asked the court to issue an order stopping implementation of the disputed system set to be effected from September 1.

In fact, they want a notice published in newspapers on July 9 on the same suspended.

They also want the sued parties ordered to call for submission of a memorandum, public participation or a taskforce established comprising all stakeholders to come up with guidelines for the implementation within six months.

“All these issues were raised after regulations were unlawfully published and the sued parties had set in motion the implementation process of the EGMS, the concerns raised ought to have been addressed earlier, prompting these proceedings,” said Mr Mogeni.

KRA has made it mandatory for all manufacturers to install EGMS in a move aimed at assisting in tracking of excisable products as well as sealing tax evasion loopholes.