Court stops KRA from demanding Sh90m from Joho firm

The Kenya Revenue Authority has been stopped from demanding Sh90 million from a firm linked to Mombasa Governor Hassan Joho.

High Court judge Eric Ogola suspended the taxman from demanding or issuing any notices for the taxes allegedly owed until the determination of a case filed by Portside Freight Terminal Ltd or further orders.

The freight firm, which says it does not admit the Sh90 million taxes allegedly owed, wants the 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 the KRA dated February 3.

Through an application filed in court, the freight company said by a letter dated February 3 addressed to the KRA managing director demanded various tax sums as tax due for the four years.

The freight firm argues that where a taxpayer has not paid tax on its due date, after assessment, then the 2015 Tax Procedure Act comes into operation.

FOLLOW THE LAW

Portside Freight Terminal Ltd is also seeking an order to quash the decision by the KRA demanding various amounts of money as tax due from it.

It is also seeking an order to compel the 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.

For its part, the KRA said the freight firm's total tax liability amounts to Sh90 million, which 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 Jesse Kamau, a supervisor at its Investigations and Enforcement Department, the KRA further said 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.

INTIMIDATION

He further said that the KRA actions of seeking records, books of account and other documents to enable it to 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 and hence the court ought to refer the case to a tribunal.

Mr Kamau urged the court to strike out the application by KRA.