The Tax Appeal Tribunal (TAT) has ruled that Tres Orix Forte, a drug used to treat anorexia, is a medicine and not a supplement. This means that it is exempt from value-added tax (VAT) and import duty.
The Kenya Revenue Authority (KRA) had demanded additional taxes from Harleys Limited for importing Tres Orix Forte, arguing that it was not a medical drug. However, the tribunal found that the drug is registered as a medicine under the Pharmacy and Poisons Act.
The ruling is significant because it clarifies the distinction between multivitamins or food supplements and prescription drugs. Insurance companies typically do not cover multivitamins and food supplements, as they are not used to treat any condition.
The government has recently introduced tax incentives to promote Kenya as a regional drug-making hub. These incentives include waiving withholding tax on royalties and interest paid to foreign companies manufacturing human vaccines in Kenya.