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reinstate an appeal that it had earlier withdrawn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withdrawn the application cannot be reinstated.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which was however withdrawn in 2016.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withdrawn be reinstated, the Tribunal held that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.
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