Sugar Duty Fight: Kenyan Manufacturers Ask High Court to Quash 433% Excise RiseSugar Duty Fight: Kenyan Manufacturers Ask High Court to Quash 433% Excise Rise

The challenge matters beyond the courtroom because industrial sugar goes into soft drinks, dairy products, confectionery and medicines, and the Kenya Association of Manufacturers says the extra cost lands on factories already facing higher fuel and transport bills. As Mwenendo earlier reported, pump prices rose again this week.

What the petition says

The petition targets a provision of the Finance Act 2026 that took effect on 1 July. It lifted excise on imported industrial sugar from KSh 7.50 ($0.06) to KSh 40 ($0.31) a kilogramme, an increase of about 433%.

Justice David Mburu certified the application as urgent on 7 October at the Milimani law courts. The respondents are the State Law Office and the Kenya Revenue Authority (KRA). The respondents had seven days from service to file replies, and no response from either had been reported at the time of writing.

KAM's central argument is procedural. It says the KSh 40 rate did not appear in the Finance Bill, 2026 as published for public participation and was introduced on the floor of the National Assembly. It wants the court to decide whether that complied with constitutional requirements, and to quash the amendment, which would restore the KSh 7.50 rate.

The cost claims

On the economics, KAM describes industrial sugar as "a critical production input rather than a finished consumer product", so the tax raises the cost of making goods locally rather than taxing a final purchase.

The association estimates the change adds about KSh 6B ($46.22M) a year to manufacturers' costs. It says capacity utilisation in affected industries could fall by as much as 50%, putting about 3,000 jobs and more than 300 internship and apprenticeship places at risk. These are KAM's own estimates and have not been independently verified.

KAM also says excise, other levies and port charges together take the burden on imported industrial sugar to about 90% of its cost, insurance and freight value. It says Uganda and Tanzania charge no excise duty on industrial sugar, and that about 90% of Kenya's exports in the affected product categories go to the regional market, which it argues leaves Kenyan firms at a disadvantage inside the East African Community.

The industries it names include beverages and soft drinks, alcoholic drinks, dairy, confectionery and chocolates, processed foods and condiments, and pharmaceuticals, where sugar is used as an excipient.

Where the case stands

The case was listed for mention on 15 October to confirm that directions had been complied with and to set next steps. The outcome of that mention had not been reported when this article was filed.

The urgency certification is not a ruling on the merits, and it does not decide KAM's request for conservatory orders. Unless the court orders otherwise, the KSh 40 ($0.31) rate remains in force and importers continue to pay it through KRA.

For consumers the effect is indirect. The Central Bank of Kenya noted that inflation rose to 6.8% in September, and manufacturers' input costs are one route by which tax changes reach shelf prices. Whether the sugar duty does so will depend on how far firms absorb it, and on the court's decision.

Mwenendo also earlier looked at Kenya's sugar safeguard debate, where the balance between protecting local millers and keeping prices down is the same tension.