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Consumers and businesses in Kenya obtained relief as the Court of Appeal blocked the Kenya Revenue Authority (KRA) from doubling excise stamp taxes on beer, bottled water, and cosmetics. 

The decision, preventing the implementation outlined in the Excise Duty (Excisable Goods Management System) (Amendment) Regulations, 2023, temporarily spares manufacturers from significant financial strain. The proposed stamp fee increases, such as a 317 percent surge for cosmetics, faced resistance in court. 

Additionally, the KRA’s Finance Bill 2023 suggestion of a five percent excise duty on false beards, wigs, and eyebrows was excluded, providing a reprieve for the beauty industry. 

Initially in May 2023, the Kenya Revenue Authority (KRA) faced legal resistance after proposing to double excise stamp taxes on cosmetics, beer, and bottled water. A court ruling granted manufacturers temporary relief, deeming the regulations unconstitutional and lacking proper public participation. 

The legal battle unfolded when the Treasury Cabinet Secretary announced new regulations necessitating updated excise stamps. 

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The court’s decision has immediate implications for affected industries, safeguarding them against sudden tax hikes and ensuring a fair procurement process.

The Kenya Revenue Authority (KRA) proposed doubling excise stamp taxes to boost revenue and enhance tax compliance. This move could have significantly impacted businesses and consumers, potentially leading to increased product prices. 

Comparatively, it echoed previous tax-related cases, highlighting ongoing tensions between revenue generation and economic considerations in Kenya’s fiscal policies.

These taxation policies reflect a delicate balance between revenue generation and their impact on consumer spending and business sustainability.

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