The High Court has struck out a Law Society of Kenya (LSK) petition against higher excise stamp fees set by the Kenya Revenue Authority (KRA), the Daily Nation reported on Saturday. Justice Roselyn Aburili ruled that LSK filed the case before Parliament had finished scrutinising the 2023 regulations. As a result, the court could not decide whether KRA had met constitutional requirements. These cover public participation, regulatory impact assessment and parliamentary scrutiny.
The dispute concerns stamps on beer, spirits, cigarettes, bottled water, soft drinks, juices and cosmetics. The stamps help identify genuine goods, track products and enforce excise duty. Manufacturers and importers pay for each stamp issued. Under the new rules, the fee on beer bottles doubled from KSh 1.50 to KSh 3. The fee on cosmetics stamps more than tripled to KSh 2.50 each.
LSK argued that the changes were introduced unlawfully and would push up costs for businesses and consumers. It said public participation was inadequate. It added that the rules were published and enforced before the required process was complete. According to LSK, the final rules were identical to the draft and no regulatory impact statement was prepared. It said the instrument also did not reach Parliament within seven sitting days. LSK further argued that stamp charges should support tax compliance, not raise revenue. It asked the court to nullify Legal Notice No. 30 of 2023.
KRA said the fees had not changed since 2017. It said inflation, a weaker shilling against the euro and a shift in sales towards cheaper products had hurt the system's finances. KRA added that Covid-19 restrictions in 2020 cut sales of higher-priced excisable goods. These included the closure of bars and restaurants. KRA said the new fees would cover the cost of stamps and help pay the KSh 4.5 billion owed to SICPA. The Swiss firm supplied the stamps under a contract signed in 2015.
KRA said it published a public notice on January 17, 2023, and held a stakeholder meeting on February 1. It received submissions from groups including the Kenya Association of Manufacturers, ICPAK, BAT Kenya, Kenya Breweries, Coca-Cola and the Alcoholic Beverages Association of Kenya. KRA said no impact assessment was needed because the changes only amended fees.
The National Assembly told the court that its Committee on Delegated Legislation had not finished its review when LSK filed the case. The Treasury Cabinet Secretary and the Attorney-General did not file responses. The judge said the committee is "the first port of call" in deciding whether a regulation-making authority complied with the Constitution and the law. The court said LSK had "jumped the gun". It also found no evidence that the House had tabled and adopted a committee report recommending annulment.