The East African Court of Justice (EACJ) has suspended Kenya’s decision to impose a 25% tax on imported glass bottles, following an application in which Tanzania’s Kioo Limited claimed the Kenya government’s decision amounts to discrimination of their products against those manufactured in Kenya.
According to Kioo Limited, the law does not grant exemptions to goods imported into the Kenyan market from the East African Community (EAC) member states, thus amounts to discrimination.
It further argues that in the absence of orders sought, it stood to suffer an irreparable injury with the likelihood of diminished business and loss of market share due to additional financial cost that would be passed to consumers leading to reduced demand for its imported glass bottles.
In its ruling, the EACJ now says its interim orders bar the Kenya Revenue Authority (KRA) from collecting extra excise duty from the Kioo Limited, which manufactures container glass bottles for soft drinks, alcohol, and food, pending the hearing and determination of the case.
EACJ judges Monica Mugenyi, Audace Ngiye, and Charles Nyachae said the issues call for a determination of non-discriminatory safeguard measures within the letter and spirit of the Treaty, Customs Union, and Common Market protocols.
The Kenyan government has imposed the tax through the Business Laws (Amendment) Act 2020, a law that amended the Kenya Excise Duty Act 2015 on the imported glass bottles. The law was to take effect on 18th March 2020.
Based in Dar es Salaam, Kioo Limited is one of the largest manufacturers of container glass used for packaging of soft drinks, beer, alcohol, and food in East and Central Africa. It exports almost 60% of its products outside Tanzania, after meeting its local requirement.
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