The High Court has issued conservatory orders suspending the implementation of the excise duty on transactions of cash exceeding half a million shillings.
The excise duty on the bulk bank cash transactions was announced by Treasury Cabinet Secretary under the Finance Bill 2018.
“I propose to introduce a robin hood tax of 0.05% of any amount of Sh500,000 or more transferred through banks and other financial institutions,” said CS Rotich during the reading of budget statement last month.
He added: “The revenue realised from these measures shall be used to fund universal healthcare.”
In a ruling on Thursday, Justice Wilfrida Okwany suspended the implementation of the proposed tax until a proper definition of cash transferred by banks is provided.
Justice Okwany noted that the excise on cash transferred by banks is an important matter that cannot be left for individual interpretation by the banks.
“This Court also takes notice of the fact that the impugned bill is still in intact nascent Athena’s it is yet to be legislated into Law by parliament,” Court ruled
This suspension follows a petition by Kenya Bankers Association (KBA) challenging the Robin Hood tax. KBA named Kenya Revenue Authority (KRA) and the Attorney General as respondents in the case.
The bankers body argues that there was no public participation in relation to the introduction of the excise duty on huge bank transactions.
“A conservatory order be issued to delay the implementation of the excise duty introduced by the finance Bill 2018 until such time allowed for alteration of the computer systems operated by the banks to implement the charge of the duty,” the petition by KBA read.
The association also argue that the proposed duty will derail the country’s vision 2030 aspirations due to the unattractiveness of cost of making transactions in Kenya as a result of the tax.
KBA further says the law is vague on the implementation framework and requires more guidelines to effect the same.
“There is ambiguity and lack of clarity. Terms in which the duty is imposed in that there is no definition of what constitutes “money transferred by banks,” argues KBA.
The hearing of the case is set for September 17th.
