Relieve to consumers as court declares bottled drinks tax unconstitutional

Relieve to consumers as court declares bottled drinks tax unconstitutional

Kenya Revenue Authority faced a blow on Monday morning as the High Court did away with the law that sought to impose taxes on bottled drinks.

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The court decision that gave consumers a huge reprieve ruled that the legal notice of imposing tax was null and void  as it was inconsistent with the Constitution and the Statutory Instrument.

Justice John Mativo said Kenya Revenue Authority Commissioner General John Njiraini failed to consider the interests of the public, noting that  KRA held two board meetings instead of going to the 47 counties to seek the views of members of the public who are the consumers.

Mativo added that the move to award SICPA securities a branch in Kenya and a five-year contract for the supply of Exercisable Goods Management Systems (EGMS) was   null and void. The Switzerland-based firm was awarded the contract at a cost of Sh15 million.

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The court further ruled that KRA was obligated to craft and implement a meaningful programme of public participation and stakeholder engagement, in the process of the tender, and ensure direct procurement to the firm met strict statutory requirements.

The suit was filed by activist Okiya Omtatah who challenged the proposed excise stamps on bottled drinks. Under the contested regulation by KRA and Treasury, manufacturers were required to affix new generation excise stamps on their products.

The Public Investments Committee of the 11th Parliament reportedly suspended the implementation of the EGMS pending the conclusion of investigations by the National Assembly . Also Read: Local Kenyan Currency Undergoes Modifications

This followed a petition to Parliament filed that the Kenya Private Sector Alliance filed in June 2016.

Omtatah had told court that  the EGMS would illegally and unconstitutionally expose manufacturers, importers and consumers to the burden of meeting extra production costs.

He seeks to protect the public from the irregular, unlawful, oppressive and unreasonable burden of higher costs of living that will be brought on by the levy.

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Legal Notice 53 of March 2017 imposed excise duty on bottled water, juices, soda and other non-alcoholic beverages and cosmetics.

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