- Manufacturers have challenged a sharp increase in industrial sugar excise duty at the High Court.
- KAM warns the higher levy could raise production costs, threaten jobs and weaken regional competitiveness.
- The court has directed respondents to file replies as the legal challenge proceeds.
Kenyan manufacturers have taken the government to court over a sharp rise in the excise duty charged on imported industrial sugar.
The Kenya Association of Manufacturers (KAM) filed a constitutional petition at the High Court in Milimani, Nairobi. It names the State Law Office, the Kenya Revenue Authority (KRA) and two other parties as respondents. At issue is a change made through the Finance Act, 2026, which lifted the levy from Ksh7.50 to Ksh40 on every kilogramme from July 1. That works out to a 433 percent jump.
Industrial sugar is a core ingredient for many food and beverage producers, so KAM argues the new rate hits them where it hurts. According to the lobby group, duties and other charges now take up roughly 90 percent of the imported product’s cost, insurance and freight (CIF) value. In other words, firms pay almost as much in taxes as the sugar itself is worth at the port.
KAM has also put numbers on the possible fallout. It estimates that manufacturers will carry an extra Ksh6 billion in costs each year. Factories could end up running at up to half their current capacity, and about 3,000 jobs would be exposed.
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Beyond the factory floor, the association warns of a regional disadvantage. It says producers in Uganda and Tanzania do not face a comparable excise charge on industrial sugar. Kenyan firms selling across the East African Community (EAC) could therefore find themselves undercut by rivals with cheaper inputs.
Even so, the real damage may vary from one company to the next. Much will depend on how heavily each manufacturer relies on imported sugar, and on whether it can absorb the extra cost or pass it on to buyers through higher prices.
KAM is also contesting how the measure came into being. Its petition claims the public was not given enough opportunity to weigh in before the increase took effect, which it says undermines the legality of the process.
The court has treated the matter with some urgency. Justice David Mburu certified the application as urgent on October 7, 2026, and told KAM to serve the court papers on all respondents by the end of the next day. Each of them now has seven days from service to file a reply.
By Benedict Aoya
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