The Kenya Revenue Authority clarifies that the case on the adjustment of Excise Duty to factor inflation was filed on 17th November 2021 challenging the procedure used to implement Legal Notice 217 of 2021. The Legal Notice sought to adjust the rate of excise duty to factor in inflation. The power to adjust rates of inflation is anchored on section 10 of the Excise Duty Act.

The case was mentioned by the High Court on the 19th November 2021 where the Court gave interim orders of status quo. The status obtaining on 19th November 2021 when the order for status quo was given is that Legal Notice Number 217 of 2021 should remain in force, the same having been published and come into effect on 2nd November 2021.

The Committee on Delegated Legislation of the National Assembly pursuant to its mandate acceded to the Legal Notice on 24th November 2021 having been satisfied upon scrutiny that the Legal Notice published on 2nd November 2021 was in accordance with the Constitution and all other relevant laws. The case is slated for further mention on 26th January 2022 to take directions on hearing; the same having not yet been heard.

At the same time, there is ongoing a separate case challenging the adjustment of excise duty to cater for inflation on petroleum products. The High Court issued a conservatory order staying the decision of the Authority to adjust excise duty rates for petroleum products effective 1st October 2021. The Authority has complied with the Court Order and has not adjusted the excise duty on petroleum products. However, the Authority has challenged this decision at the Court of Appeal.

As such, the allegation that the Authority’s Commissioner General has disregarded the Court Order is not merited.

Commissioner for Legal Services and Board Coordination