Insurance companies say it is unclear on how they should implement the 10 per cent excise tax on all financial service transactions and want a court interpretation.
"We have no idea what it is they want us to levy the 10 per cent on," AKI executive director Tom Gichuhi told the Star.
"We are going to court tomorrow (Thursday)...i have just signed an affidavit to that effect just now," Gichuhi said on Wednesday evening.
In an amendment to the Customs and Excise Act through the Finance Bill 2013, Treasury Cabinet Secretary Henry Rotich introduced a 10 per cent excise tax on all transactions undertaken by financial services firms.
Those affected by the new law are commercial banks, mobile money transfers, co-operative societies, insurance companies and the Kenya Post Office Savings Bank and are expected to remit the tax by the 20th of each month.
AKI the industry's lobby organisation whose members are the registered insurance companies in Kenya said it was not sure how or if the tax will affect premiums.
Banks will increase their service fee starting next month after getting an extension to push the implementation date from June 18.
Kenya Reinsurance boss Jadiah Mwarania on his part said that most likely premiums will increase as insurance companies struggle to implement the new tax orders.
"What will affect the general public will be the premiums...insurance covers will become more expensive as renewals come," said Mwarania.
Bankers had also gone to court over the matter arguing that there was lack of clarity on some of the arising issues such as who was liable to collect the excise tax.
The Kenya Bankers Association argued that excise duty should be levied on goods and not services but the court eventually ruled against the bankers.