KRA denies keeping public in dark over 31 goods tax rise plan

KRA Commissioner General Githii Mburu. FILE PHOTO | NMG

    

By JOSEPH WANGUI
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SUMMARY

• The Kenya Revenue Authourity (KRA) has denied claims that its decision to increase excise duty on at least 31 goods was made without involvement of the public.
• In its response to a court case that is seeking to quash the increase of excise duty on the products by 4.97 percent, KRA says the review of the rates was not a secret.
• The increment was in line with the average annual inflation rate.

The Kenya Revenue Authourity (KRA) has denied claims that its decision to increase excise duty on at least 31 goods was made without involvement of the public.

In its response to a court case that is seeking to quash the increase of excise duty on the products by 4.97 percent, KRA says the review of the rates was not a secret. The increment was in line with the average annual inflation rate.

The authority further says the two citizens who sued over the impending tax increment had not prove that the inflation rate adjustment will adversely affect their economic rights.

Among the items set to attract higher taxation are cigarettes, bottled water and motorcycles.

Others are cigarettes, beer, fuel, bottled water, juice, sugar confectionaries, chocolate and products containing nicotine.

KRA states that prior to coming up with the new excise duty rates, it invited experts and stakeholders in the affected fields for engagement and received comments from eight, among them the British American Tobacco Kenya (BAT), Kenya Association of Manufacturers, Kenya Wine Agencies Limited (Kwal), Alcohol Beverages Association of Kenya (ABAK) and Petroleum Institute of East Africa (PIEA).

Others who sent submissions include Total Energies Marketing Plc, Price Water Coopers (PWC) and Kenya Breweries Limited/UDV distributors.

KRA also carried out three virtual stakeholders engagement on the inflation adjustment between September 9 and 23.

"There has been more than adequate public participation in the adjustment of the excise duty rates. The Commissioner-General is in the process of engaging with the Cabinet Secretary for Finance and National Treasury on the inflation adjustment. The outcome of the process is yet to be determined," says the KRA through Mr Maurice Oray.

He is the Deputy Commissioner within the Domestic Taxes department. He explains that every year cost of goods and services increase due to the dynamics within and outside the economy.

Mr Oray says in adjusting the inflation rate, the Commissioner-General may exercise discretion depending on the circumstances. The case will be heard on October 12.