Kenya Breweries Limited (KBL) will have to pay KSh 513 million to the Kenya Revenue Authority (KRA) after the High Court overturned a ruling that had earlier spared the brewer from the taxman’s claim.
- •The court found that the excise duty rates imposed in late 2021 were valid and in effect, despite a “status quo” court order that the company believed had frozen them.
- •The dispute began when the government raised excise duty on beer and other goods effective in November 2021.
- •The tax authority demanded payment under the new rates, but Kenya Breweries refused, arguing that a separate court case had effectively paused the implementation of those rates.
In 2023, the Tax Appeals Tribunal sided with the brewer, declaring that the new rates were suspended between November 2021 and February 2022. KRA challenged that decision, insisting that the tribunal had no power to interpret what a High Court order meant, and that the excise duty law was already in force when the order was issued.
The High Court agreed with the tax authority, ruling that the “status quo” order came after the new rates had already taken effect, meaning the law had not been frozen. The judge also said the Tribunal had overstepped its mandate by trying to interpret a High Court decision.
“The status quo order was granted on the mistaken belief that the implementation of the Legal Notice had not yet commenced. However, as the Court expressly held that by 19th November 2021, the Legal Notice had already taken effect and its implementation had passed into the domain of the law, beyond the control of the Commissioner,” ruled Justice Freda Mugambi.