TAX APPEALS TRIBUNAL UPHOLDS KRA’S DEMAND OF 60M TAX

TAX APPEALS TRIBUNAL UPHOLDS KRA’S DEMAND OF 60M TAX

By Donald Kogai

The Tax Appeals Tribunal (TAT) dismissed

a taxpayer’s application to reinstate a tax

appeal paving way for Kenya Revenue Authority

(KRA) to collect Kshs.60 million from a

taxpayer.

The taxpayer, Muhugu Limited, made the

application on 16th January 2020 seeking to

reinstate an appeal that it had earlier withdrawn

from the Tribunal. The tribunal ruled that once

withdrawn the application cannot be reinstated.

The ruling paves way for KRA to enforce the

collection of taxes which stood at Kshs.

59,640,304 at the time of filing of the

Application for reinstatement of the Appeal on

the 15th March 2016.

By the time the application for reinstatement

was made KRA, had already placed a caveat

restriction over the property of Muhugu Limited

restricting the transfer of the property.

The tax dispute started after KRA issued

Agency Notices to Muhugu Limited’s bankers,

Kenya Commercial Bank Limited to

recover the taxes owing prompting Muhugu

Limited to seek to reinstate an Appeal filed at

the Local Committee in 2014 against KRA

which was however withdrawn in 2016.

KRA saw the taxpayer’s application for

reinstatement of the appeal as done in bad

faith and solely because of its quest for taxes

that are otherwise due. Following the Ruling the

caveat will remain in force until such time the

tax is paid.

Citing Section 27 (1) of the Tax Appeal Tribunal,

2013 which stipulates that an appellant may, by

notice in writing, withdraw the appeal, the

Tribunal ruled that the Applicant exercised its

rights.

However, on whether a matter that had been

withdrawn be reinstated, the Tribunal held that

the appeal cannot be reinstated as the

withdrawal was complete and effective. The

Tribunal relied on precedence of High court

rulings.