Kenyan manufacturers challenge 433% industrial sugar excise rise in High Court

The Kenya Association of Manufacturers (KAM) has asked the High Court in Nairobi to strike down an increase in excise duty on imported industrial sugar from KSh 7.50 to KSh 40 a kilogramme, a rise KAM puts at 433%. The court set the case for mention on 15 October, The Star reported that day.

KAM filed a constitutional petition at the Milimani High Court against the State Law Office, the Kenya Revenue Authority (KRA) and two other respondents, Capital FM reported on 9 October. It challenges the duty set under the Finance Act, 2026, which took effect on 1 July. Kenyans.co.ke, reporting on 8 October, said the petition targets Section 36(a)(vi) of the Act.

Justice David Mburu certified the application as urgent on 7 October. The respondents have seven days from service to reply. The mention on 15 October is to confirm compliance with the court's directions and for further directions.

KAM, a business membership body for manufacturers founded in 1959, says the higher duty raises production costs. It estimates KSh 6 billion in extra annual costs (about US$46 million, at the Central Bank of Kenya's rate of KSh 129.94 to the dollar on 8 October, or about 310 million yuan at the China Foreign Exchange Trade System's central parity of 6.7330 yuan to the dollar on 9 October), capacity utilisation falling by up to 50%, and about 3,000 jobs and more than 300 internship and apprenticeship places at risk. With other taxes and charges, KAM says, the total burden comes to about 90% of the goods' cost, insurance and freight (CIF) value.

The association also says Uganda and Tanzania charge no excise duty on industrial sugar, and that about 90% of Kenya's exports in the affected categories go to the regional market.

On process, KAM says the KSh 40 provision was not in the Finance Bill published for public participation and was added on the floor of the National Assembly. KAM argues the process was unconstitutional because there was no meaningful public participation. It seeks a declaration that the provision is unconstitutional and an order quashing the amendment, which would restore the KSh 7.50 rate. Kenyans.co.ke listed Articles 10(2)(a), 118(1)(b) and 201(a) of the Constitution among the grounds, and said KAM calls the duty irrational, arbitrary and disproportionate.

The government said when the Act took effect that the increase was meant to protect local sugar farmers and millers from cheaper imports, Citizen Digital reported on 2 July.

The urgency certification is not a ruling on the merits or on KAM's request for conservatory orders (interim orders that hold a measure in suspension). The KSh 40 rate stays in force unless the court orders otherwise, The Star said.