Kenyans can breathe a sigh of relief as edible oil prices are expected to drop following a High Court judgment that overturned the government’s decision to introduce a 10 percent import duty on crude palm oil.
The court’s Constitutional and Human Rights Division in Nairobi declared the tax unconstitutional, citing violations of parliamentary oversight and public participation laws.
The legal battle began when the Consumers Federation of Kenya (Cofek) challenged the levy, arguing that its introduction through an East African Community (EAC) Gazette Notice – without parliamentary approval or public consultation – breached Kenya’s Constitution.
The duty, which took effect in July 2024, had pushed up cooking oil prices, straining household budgets amid rising living costs. This followed the government’s decision to halt the zero percent import duty rate on crude palm oil and impose the 10 percent rate.
“It is important to observe that the constitutional requirements of parliamentary approval and public participation are not empty formalities,” the court stated.
“They serve as crucial mechanisms to subject policy decisions, especially those with significant socio-economic ramifications, to democratic scrutiny and debate.”
The court emphasised that the process of introducing the duty was flawed, adding: “By bypassing these procedures, the respondents denied the people of Kenya the opportunity to have a say on a measure that directly affects their fundamental rights to food and dignity.”
While ostensibly introduced to curb revenue losses from misdeclared palm oil imports, the duty had an immediate and painful ripple effect – driving up the cost of cooking oil, a staple commodity in Kenyan households already grappling with soaring food prices.
According to Cofek, the government’s decision destabilised the local edible oils manufacturing sector by significantly increasing raw material costs.
The consumer group contended that this escalation adversely affected local industries’ competitiveness and threatened closures, potentially costing more than 10,000 Kenyans their jobs in palm oil processing and related value-addition chains.
In allowing the petition, the court ruled that taxation powers reside solely with Parliament and cannot be delegated to regional bodies without legislative scrutiny.
“The Executive’s unilateral imposition of the 10 percent duty on crude palm oil without specific parliamentary approval is unconstitutional,” the court noted, adding that the move violated Articles 209 and 210 of the Constitution, which safeguard against arbitrary taxation.
The court dismissed the government’s argument that public participation occurred through generic budget forums, stating that Kenyans were never specifically consulted on a policy directly impacting food affordability.
It stressed that public participation must be “real, not illusory” – requiring targeted outreach, transparency, and genuine opportunities for citizens to influence decisions.
While acknowledging Kenya’s obligations under the EAC Treaty, the court clarified that regional agreements cannot override domestic constitutional requirements.
The court issued prohibitory orders barring authorities, including the Kenya Revenue Authority and Cabinet Secretaries for Treasury and EAC, from enforcing the duty.
It also mandated that future tax measures under the EAC’s Common External Tariff must undergo proper public and parliamentary scrutiny.
Further, the court found that the Treasury and the EAC Cabinet Secretary had unlawfully bypassed Kenya’s legislative process by introducing the tax through regional mechanisms rather than seeking parliamentary approval.
Citing Articles 209 and 210 of the Constitution – which mandate that taxes can only be imposed or varied through legislation – the court emphasised that “taxation is a sovereign function exercised by the people through their elected representatives.”
“The Executive cannot use regional treaties as a backdoor to impose taxes without involving Parliament,” the judgment stated. “To hold otherwise would create a dangerous precedent, allowing the Executive to unilaterally burden citizens without democratic checks.”
Local edible oil manufacturers had earlier sounded alarms, warning that increased raw material costs threatened thousands of sector jobs.