Acting Treasury Cabinet Secretary, Ukur Yattani, was put on the spot by a lawsuit involving beverage and cosmetic firms just days after his appointment to the job by President Uhuru Kenyatta.
The members of the association of manufacturers, importers, distributors, and retailers seek the rollout of the Excisable Goods Management System stopped.
Reports by Business Daily disclosed that bottled water, juices, non-alcoholic beverages, and cosmetic companies went to court to protest a new tax system set to start in September that is expected to help the Kenya Revenue Authority (KRA) net Ksh3.6 billion more revenue.
They sued the National Treasury Cabinet Secretary, KRA and the Attorney General, Paul Kihara, while claiming that rollout of the Excisable Goods Management System (EGMS) tax system on their products lacked consultation, as well as the legal basis.
Through lawyer Kelvin Mogeni, the firms claimed that the new tax measures set to be imposed by KRA would unnecessarily inconvenience consumers.
The companies further went to court to seek an order to stop the implementation of the disputed system set to be effected from September 1.
They demanded that the notice published, in newspapers on July 9 on the same, be suspended.
They further maintained that the sued parties ordered to call for submission of a memorandum, public participation or a taskforce established comprising all stakeholders, to come up with guidelines for the implementation within six months.
“All these issues were raised after regulations were unlawfully published, and the sued parties had set in motion the implementation process of the EGMS, the concerns raised ought to have been addressed earlier, prompting these proceedings,” Mogeni stated.
KRA made it mandatory for all manufacturers to install EGMS in a move aimed at assisting in the tracking of excisable products, as well as sealing tax evasion loopholes.
