KRA fights off Sh500m penalty for held goods

Times Tower, the KRA headquarters in Nairobi.

File | Nation Media Group

By  Brian Ocharo

What you need to know:

• In a ruling delivered by Mombasa High Court Judge Patrick Otieno, KRA is supposed to pay the importer damages suffered when the consignment was detained because of a tax dispute.
• KRA is protesting the ruling and has obtained an order suspending payment or execution of the judgment pending hearing and determination of a plea that it intends to file at the Court of Appeal.
  

Taxpayers could lose Sh526 million after the taxman illegally detained more than 4,000 tonnes of sugar imported under the duty free arrangement.
The consignment that was imported between 2007 and 2008 by Akaba Investment Ltd was illegally held by the Kenya Revenue Authority for more than one year before it was released to the company in December 2008.

In a ruling delivered by Mombasa High Court Judge Patrick Otieno, KRA is supposed to pay the importer damages suffered when the consignment was detained because of a tax dispute.

Storage charges

The judge said Akaba proved that as a result of the KRA action, its operations were disrupted, and it was exposed to business losses in anticipated profits and in additional storage charges and financial costs.
“The upshot is judgment is entered for the plaintiff against the defendant for the sum of $1,132,460 and Sh405,108,353 as special damages with interest thereon at court rates from the date of filing suit until payment in full,” said the judge in a judgment dated May 5.

KRA is protesting the ruling and has obtained an order suspending payment or execution of the judgment pending hearing and determination of a plea that it intends to file at the Court of Appeal.