The High Court of Kenya (HC) recently ruled that retrospective imposition of higher excise duty on fees for money transfer services charged by Financial Institutions (FI’s) for the period 1 July 2018 to 28 September 2018 was unfair and unreasonable.
The Kenya Bankers Association (KBA) (the Petitioner) had filed a case against the Attorney General (1st Respondent) and the Kenya Revenue Authority (KRA) (2nd Respondent) challenging the constitutionality of a retrospective increase in the excise duty rate from 10% to 20%.
In delivering its judgment, the HC acknowledged that the enactment of retrospective laws including tax laws is not unconstitutional. The retrospective law is, however, deemed unfair and unconstitutional when its retrospective application is impractical and unreasonable.
Source EY
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