Finance Act 2023: Court Says EPRA Boss Was Right To Impose 16 VAT On Fuel

The three-judge bench which was making its final ruling on the Finance Act 2023 dismissed a case which accused Energy and Petroleum Regulatory Authority (EPRA) Director General Daniel Kiptoo of imposing the 16 per cent VAT fuel levy despite the existence of court orders which suspended the implementation of the Act on Friday, June 30.

While delivering her ruling, Justice Christine Meoli on Tuesday, November 28 ruled that there was no sufficient evidence to prove that Kiptoo was informed regarding the suspension of the Act on the same day EPRA moved to hike fuel prices following the doubling of the value-added tax (VAT) on fuel from 8 to 16 per cent. 

Busia senator, Okiya Omtatah, who sued the EPRA boss for contempt by moving to implement the fuel prices after the High Court had suspended the implementation of the Act, had revealed that he reached out to Kiptoo with the aim of compelling him to reverse the change in fuel prices pending the hearing and determination of his case.

However, Kiptoo in his defence before the 3-judge bench that consists of Justices David Majanja, Christine Meoli and Lawrence Mugambi, stated that he was only informed that the High Court had temporarily suspended the Act after EPRA released the July-August fuel prices.

"Despite the court orders being issued in the afternoon of June 30, it was not until close to midnight on July 1, that the alleged he was served with the order. By the time he released the press release, there was no way, he would have known about the order.

"We find Daniel Kiptoo (EPRA MD) not guilty of contempt. We hold that he did not have knowledge of the order by the time he issued the press release; further, the petitioners have not put forth any evidence that shows willful disobedience of the order," read the ruling in part.

Following a petition by Omtatah, the High Court stopped the law from taking effect on Saturday, July 1. The law entailed the rise of VAT on fuel from 8% to 16%. 

However, moments after the ruling, EPRA announced the current fuel prices in line with the new fuel VAT. Super Petrol had thus at the time retailed at Ksh195.53 per litre, Diesel Ksh179.67 and Kerosene Ksh173.44 per litre in Nairobi.

Meanwhile, the three-judge bench also delivered the ruling which declared the Housing Levy introduced in the Finance Act as unconstitutional.

However, the government lawyers requested 45-day stay orders to make necessary amendments to the Housing Levy through the National Assembly in a bid to make it constitutional again.

Ahead of the ruling on the prayers anticipated to be made on Tuesday at 3.00 pm, Deputy President Gachagua pleaded with the Judiciary to support the Kenya Kwanza housing levy which though imposed on salaried Kenyans, was enabling ordinary Kenyans to own homes.

"The affordable housing is one of the most thoughtful strategies of our administration to dignify people. Shelter is a Constitutional requirement, we want Kenyans to have dignified shelter with proper sanitation.

"I am aware that people have gone to court to try to suspend the housing levy and sabotage the housing program. Much as we respect the independence of the judiciary, I want to request our judges to exercise judicial discretion and not sabotage that programme," he pleaded.