A demand for Sh90
million taxes allegedly owed to Kenya Revenue Authority by a firm
associated with the family of Mombasa Governor Hassan Joho has been
suspended by the High Court.
Judge Eric Ogola suspended
the taxman from demanding or issuing any notices for the taxes until
the determination of a case filed by Portside Freight Terminal Ltd or
further orders are issued.
The freight firm, which has
not admitted the Sh90 million taxes alleged owed, wants KRA prohibited
from issuing the notices for the years 2008 to 2011 or any years
thereafter.
It also wants the taxman prohibited from
issuing the notices to either its directors, shareholders, bankers or
any of its creditors pursuant to a letter by KRA.
Through
an application filed in court the freight company said KRA demanded
various tax sums as tax due for the four years, in a letter dated
February 3 and addressed to the managing director.
The
freight firm argues that where a taxpayer has not paid tax on its due
date, after assessment, then the Tax Procedure Act, 2015 comes into
operation.
Portside Freight Terminal Ltd is also
seeking for an order to quash the decision by KRA demanding various
amounts of money as tax due.
It is also seeking for an order to compel KRA to follow
the law as clearly spelt out in the Act in matters of assessment and
recovery of tax and related matters as by law determined.
Tax liability
On
its part, KRA said the freight firm total tax liability amounts to Sh90
million that has been due since the last day of the fourth month
following the end of every year of income or the company’s accounting
period.
Through Mr Jesse Kamau, a supervisor at its
Investigations and Enforcement Department, KRA further said that its
actions are premised on the provisions of tax statutes.
“For
avoidance of doubt, the respondent avers that its actions of demanding
Sh90 million are independent of any interactions the parties herein
might have in the past suits,” said Mr Kamau.
He
further said that KRA actions of seeking records, books of accounts and
other documents to enable it execute its statutory mandate does not
amount to harassment or intimidation.
Mr Kamau said the suit by the freight firm is premature and it ought to have sought a remedy under the Tax Appeals Tribunal.
He
added that the freight firm has failed to explore the internal
mechanisms established under the Tax Appeals Tribunals Act and the Tax
Procedure Act hence the court ought to refer the case to a Tribunal.
pmuyanga@ke.nationmedia.com
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