Kenya Bankers Association have moved to court to challenge the 2018/2019 budget.
The directive introduced a tax of 0.05 percent on any amount of 500,000 shillings or more transferred through banks or other financial institutions.
“A conservatory order do issue 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,” they say.
Through lawyer Kenneth Alison Franser, the bankers say that there was no public participation in financial matters in relation to the introduction of the new excise duty.
In addition, the bankers say the imposition of the new duty on less than a 10 day notice is neither reasonable nor procedurally fair.
“The implementation of the duty will require changes to the computer programs of all members of the bankers association which can not be done in this limited time,” they say.
They claim that the finance bill 2018 has not provided any guidelines on how the duty is to be applied and no specific exclusions from the duty is provided.
They claim that the introduction of the new bill has an economic impact in that it will lead to erosion in investment returns between 1.0 to 5.0 depending on the nature of the fund and investment strategy.
The association further claim that the proposed duty will significantly hamper the county’s vision 2030 aspirations due to the unattractiveness of cost of carrying out transactions in Kenya as a result of the tax.
The Association avers that it’s members will find it difficult if not impossible to carry out transactions over 500,000 shillings from today with consequent disruption of business for the customers of all banks and damage to the economy of Kenya.
