The Kenya Association of Manufacturers (KAM) has moved to the Milimani High Court to challenge a sharp increase in excise duty on imported industrial sugar, arguing that the new Sh40 per kilogramme levy is unconstitutional and places an unfair financial burden on businesses.
KAM has filed a constitutional petition against the government and the Kenya Revenue Authority (KRA), challenging Section 36(a)(vi) of the Finance Act 2026, which raised the duty from Sh7.50 to Sh40 per kilogramme.
In court documents seen by Flash News, the manufacturers argue that the new rate was introduced without meaningful public participation, raising concerns over the constitutionality of the legislative process.
The association wants the court to declare the provision null and void, claiming that its enactment contravened Articles 10(2)(a), 118(1)(b) and 201(a) of the Constitution, which address public participation and principles governing public finance.
“The Petitioner humbly prays for judgment against the Respondents for a declaration that the enactment of section 36(a)(vi) of the Finance Act, 2026 was undertaken in contravention of Articles 10(2)(a), 118(1)(b) and 201(a) of the Constitution of Kenya, 2010, for want of meaningful public participation, and that the said provision is accordingly null, void and of no legal effect,” KAM argued in its petition.
Manufacturers Warn of Higher Business Costs
The association maintains that the increased levy could significantly raise operating costs for businesses that depend on imported industrial sugar as a production input.
KAM further argues that the tax could lead to cumulative over-taxation of certain taxpayers, undermining the constitutional principle that the tax burden should be shared fairly.
The government introduced the Sh40 per kilogramme excise duty under the Finance Act 2026, replacing the previous rate of Sh7.50 in a move intended to promote local sugar production.
However, KAM argues that imported sugar remains a lawful input for businesses and that the higher levy is irrational, arbitrary and disproportionate.
The manufacturers are also seeking a declaration that the contested provision violates constitutional principles and the economic rights of their members and employees.
Court Gives Respondents Seven Days to Reply
Following the filing of the petition, Justice David Mburu certified the matter as urgent and directed the government, KRA and the other respondents named in the case to file their responses within seven days.
The matter is scheduled for mention on October 15, when the court is expected to consider the next steps in the proceedings.
The case places the increased tax on imported industrial sugar under judicial scrutiny, with the outcome potentially affecting businesses that rely on the commodity for their manufacturing operations.
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