Accountants warn excise duty may raise transport hazards, costs

Accountants have raised the alarm over a mistake in the Excise Duty Act that could lead to unsafe transport conditions and economic losses, citing the wrongful classification of imported safety glass.

The Institute of Certified Public Accountants of Kenya (ICPAK) said the law lumps together specialized safety glass with ordinary float glass, resulting in unintended taxation on crucial safety materials.

During a public consultation on the Excise Duty Amendment Bill 2025, ICPAK council member Hesbon Omollo pointed out that the current classification system includes safety glass under codes 7005 and 7007, which are typically used for float glass.

He explained that this is problematic because safety glass—such as laminated and tempered types used in vehicles—is a specialized material not produced locally.

According to ICPAK, the misclassification threatens both public safety and market stability by making safety glass more expensive and less accessible.

“We are recommending the deletion of this erroneous provision or at the very least, explicit exclusion of safety glass used in vehicles, aircraft, and rail transport,” Omollo said.

The institute noted that imposing an excise tax on imported safety glass would raise the cost of production and encourage the use of lower-quality substitutes.

This, they warned, could put passengers at risk, as these glass types are designed to meet strict international standards for protection.

Kenya, ICPAK noted, lacks the manufacturing capacity for this specialized glass and depends entirely on Original Equipment Manufacturers (OEMs).

With no local alternative, taxing these imports could disrupt transport safety and strain industries relying on compliant materials.

ICPAK also raised concerns that the current classification system contradicts the Common External Tariff (CET) used by East African Community (EAC) member states, which aims to harmonize trade codes across the region.

By not aligning with this standard, the law may hinder regional trade and complicate customs enforcement.

The institute warned that the ambiguity in classification could result in delays and losses in government revenue, as importers choose to suspend transactions to avoid unintended penalties.

“Until the issue is addressed,” ICPAK stated, “importers are hesitant to proceed with transactions,” which has already led to a temporary stop in revenue collection on safety glass imports.

The Parliamentary Finance and Planning Committee took note of the issue and asked ICPAK to provide detailed data on the impact of excise duty changes, not only on safety glass but also on transformers.

In response, ICPAK pledged to deliver a comprehensive report with supporting evidence before the committee’s next session.