The High Court has rejected the taxman’s effort to reclassify two high-dose vitamin E products as food supplements, upholding the tribunal’s assessment that the capsules are medicines for customs purposes.
Justice Patrick Otieno dismissed an appeal by the Kenya Revenue Authority (KRA) that sought to reclassify the Vitamin E products, EVIT 200 and EVIT 400, imported by Sai Pharmaceuticals, as food supplements instead of medicines — implying a higher tax rate.KRA argued that the EVIT products are dietary supplements, not drugs, and that recent explanatory-note changes and laboratory analysis supported reclassification and additional tax assessments totaling KSh 1.4 million.High-dose vitamin E supplements like EVIT are prescribed for conditions linked to stress, cardiovascular diseases, and certain neurological disorders.
The court rejected those arguments by affirming that the Vitamin E products were registered as medicaments by the Pharmacy and Poisons Board and had previously been treated as medicaments in KRA tariff rulings issued in 2016. The court said those prior rulings had not been lawfully withdrawn and therefore carried significant weight.
“The court notes that the classification by the Pharmacy and Poisons Board, being a statutory regulatory body, must be left to carry the due evidentiary weight,” the ruling stated.
Justice Otieno also ruled that the manufacturer’s product literature and the way the capsules are sold and prescribed supported a therapeutic purpose. The court noted that the manufacturer’s materials list specific disease-related uses, the capsules come in measured retail doses and physician prescriptions were on the record, and the dosages — 200 mg and 400 mg of vitamin E — greatly exceed typical recommended daily intakes. Taken together, those factors satisfied the test for “medicaments” rather than ordinary food supplements.
“EVIT products are intended for the prevention or treatment of diseases as shown by the manufacturer’s literature and high dosage, then by the very terms of these notes, they cannot be classified under food supplements,” the court decided.
The court also faulted KRA for relying on an internal laboratory analysis without disclosing the report to Sai Pharmaceuticals or to the Tax Appeals Tribunal. The court held that if a laboratory test is the basis for changing a taxpayer’s classification, the test results must be made available for verification and challenge.
By withholding the report and citing confidentiality, the authority undermined procedural fairness and deprived the respondent of a fair opportunity to contest the reclassification.
“The onus rested on the Commissioner to justify a change in classification hence the lack of transparent and verifiable evidence was procedurally infirm and susceptible to being set aside on this ground alone,” the court said.
Vitamin E plays a crucial role in maintaining healthy skin, eyes, and reproductive health. It also contributes to proper blood circulation by preventing platelets from clumping together.