Importers of crude palm oil in Kenya have been advised to review and pursue duty refunds after the High Court ruled that a 10 percent import levy on the commodity was unconstitutional and improperly enacted
The Kenya Revenue Authority (KRA) faces pressure over refunds after the High Court declared the State’s 10 percent duty on palm oil imports illegal.
Importers of crude palm oil in Kenya have been advised to review and pursue duty refunds after the High Court ruled that a 10 percent import levy on the commodity was unconstitutional and improperly enacted, potentially delivering a boost to traders and processors burdened by the tax..
In a tax alert, professional services firm PricewaterhouseCoopers (PwC) said importers who paid the 10 percent duty during the 12 months ending June 30, 2025, should consider seeking refunds of the overpaid amounts now that the levy has been struck down.
“For businesses, the decision opens the door to refund claims on duties paid under the invalidated 10 percent rate and signals a shift toward greater transparency in tariff adjustments in the future,” said Maurice Mwaniki, PwC Associate Director, Indirect Taxes, in an advisory.
“Importers should carefully review any duties paid under the now- invalid 10 percent rate on crude palm oil for the 12-month period up to June 30, 2025, and explore options for seeking refunds of duties.”
PwC’s advisory to importers underscores that import duty overpayments could be recoverable.
“The judgment reaffirms the principle of 'no taxation without representation,’ underscoring that tax measures cannot be implemented through executive discretion or regional protocols without domestic legislative oversight,” Mr Mwaniki said in an interview.
However, the firm cautioned that government authorities retain the right to appeal the High Court decision, meaning importers should consult tax and legal advisers before initiating refund claims.
“We wish to point out that the Treasury reserves the right to appeal the decision. We will monitor developments in this matter,” read the PwC advisory.
The decision implies that the cost of cooking oil should now come down following the decision to zero-rate the importation of raw materials used in the manufacturing of cooking oils.
Palm oil is the dominant edible oil consumed in Kenya and is mainly imported from Malaysia and Indonesia, with Cameroon and South Africa emerging as suppliers.
KAM response
In a media response to the High Court decision, the Kenya Association of Manufacturers (KAM) said its role remains to support members’ understanding of applicable procedures under the East African Community Customs Management Act (EACCMA) framework.
“While the decision provides a legal basis for eligible members to pursue refunds for duties paid during the affected period, KAM’s role remains to support members’ understanding of the EACCMA framework,” said KAM in a statement.
“Individual refund applications will, however, be guided by each company’s specific circumstances and internal assessments, pending any further directions or appeal from the government.”
KAM said the ruling underscores the importance of constitutional compliance in taxation and offers a pathway to fairer trade practices for Kenya's manufacturing sector.
“This judgment sets out an important precedent for transparency, public engagement, and parliamentary oversight in the formulation of tariffs and other regulatory measures,” KAM.
“It underscores the need for a broader review of levies, fees and charges imposed on businesses in Kenya, which cumulatively increase the cost of doing business and affect competitiveness, particularly for small and medium-sized enterprises (SMEs).”
KAM urges the government to streamline and harmonise overlapping levies across agencies to reduce unnecessary costs.
“KAM is monitoring the government’s response to assess the ruling’s impact on existing tariff structures. In the meantime, manufacturers are maintaining normal operations under the current tariff regime while awaiting formal clarification on the government’s next steps.”
Cofek challenge
The legal battle began when the Consumers Federation of Kenya (Cofek) challenged the levy, arguing that its introduction through the East African Community Gazette Notice, without parliamentary approval or public consultation, breached Kenya’s Constitution.
The court ruled that the process required both public participation and parliamentary scrutiny of East African Community tax proposals in a case that also enjoined the bloc's Council of Ministers.
Kenya’s largest import among nuts and oil crops is oil palm products, including crude and oil as well as olein fractions from Asian countries such as Indonesia and Malaysia.
According to the Agriculture and Food Authority (AFA) statistics, Kenya imported 829,236 tonnes of palm oil products in 2024, the year in dispute.
“In 2024, the country imported 829,236 tonnes of oil palm products, valued at $890.94 million (Ksh114.96 billion), primarily as raw materials for processing edible oil and related cosmetic products,” says the AFA.
“The second most significant import was sunflower oil, sourced from various European countries to meet the country’s edible oil needs.”
Edible oil consumers in Kenya footed a steeper bill in the quarter ended June 2025 after the value of imports of the commodity jumped 6.84 percent to $198.5 million (Sh25.61 billion) on higher prices in the international market.
The US Department of Agriculture projects Kenya’s palm oil imports will reach 1.05 million tonnes during the 2025/26 season.
This volume comes close to the 1.1 million-tonne peak recorded in 2020 and would mark one of the highest import levels ever for East Africa’s largest economy.
Kenya currently imports crude palm oil worth Sh140 billion annually through five companies – Bidco, Kapa Oil, Pwani Oil, Menengai, and Golden Africa – according to the Treasury data.
