Kenya: KRA Calls for Dismissal of Cases Against Vat On Fuel

President Uhuru Kenyatta and his Deputy William Ruto (file photo).
11 September 2018

The Kenya Revenue Authority wants four cases in the High Court challenging the 16 per cent VAT imposed on petroleum products dismissed, saying there is nothing unconstitutional about the law.

The authority argued that the cases by the Central Organisations of Trade Unions (Cotu), activist Okiya Omtatah , lawmakers Babu Owino, Antony Oluoch and Senator Cleophas Malala, are an abuse of the court process.

The authority said that, through the petition, the applicants are asking the court to take over the powers of the Executive and Legislature, in contravention of the doctrine of the separation of powers.

While Justice Chacha Mwita had declined to suspend the law, Justice Stephen Riechi, sitting in Bungoma, issued temporary orders suspending it.

DEFIED PARLIAMENT

On Monday, the parties appeared before Justice John Mativo in Nairobi and were directed to argue the case on September 17.

Mr Omtatah and Cotu argue that the National Treasury, the Energy Regulatory Commission (ERC) and KRA have defied Parliament's intentions by levying the VAT, which lawmakers voted to suspend until September 2020.

Cotu, through lawyer Okweh Achiando, argued that taxpayers might not recover the money already collected. Mr Omtatah added that Parliament's intention was clear in voting for the suspension of the new levy.

STATE ORGANS

"The court, being one of the State organs, cannot afford to hide under the doctrine of judicial deference, but should listen to the voice of the people of Kenya and their cries brought about by the operationalisation of the VAT charge. The people of Kenya who live below the poverty line cannot, in the economic circumstances, afford the tax levied," Cotu boss Francis Atwoli said in suit papers.

Mr Omtatah said Kenya depends 60 per cent on petroleum fuels for industrial and domestic use, and an increase in the price of petroleum products elicits an instant rise in the cost of most products and services.

"We cannot talk of growing the economy while at the same time escalating the cost of the factors of production by huge margins," Mr Omtatah said.

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