KENYAN HIGH COURT RULE ON INTRODUCED MINIMUM TAX AS UNCONSTITUTIONAL

High Court judgment on Minimum Tax Illegal

By Donald Kogai

The High Court in Machakos has declared

Section 12D of the Income Tax Act, the

section that introduced Minimum Tax,

unconstitutional for violating Article

201(b)(i) of the Constitution. The

court noted that minimum tax was

unconstitutional for subjecting

taxpayers to double taxation and was

punitive in nature. The Court was of

the opinion that taxation cannot be

fair when a system of tax is introduced

to diminish the capital of a business.

The Kenya Revenue Authority

respectfully disagrees with the

findings of the Court and will prefer

an appeal to the Court of Appeal to

challenge this finding. This is to

ensure that KRA continues to review and

improve on tax policies in order to

reduce the tax burden while ensuring

that every citizen contributes their

fair share of tax.