Kenya Revenue Authority (KRA) has initiated legal proceedings to dispute and set aside a Court order restricting the collection of KShs. 8.2 billion in taxes owed by Kenya Breweries Limited.
The order was issued on April 28, 2023, by the High Court. This order came after an earlier 22nd January 2021 approval by The National Treasury and Economic Planning allowing the KBL to abandon the tax. However, the approval was revoked on 24th march 2023.
The tax demand is therefore based on the revocation of the approval by the Cabinet Secretary National Treasury and Economic Planning.
The High Court order was issued based on a misinterpretation of Section 37 of the Tax Procedures Act, which pertains to tax relief for situations where the Commissioner is uncertain or unable to recover unpaid tax. KRA contends that the section does not relate to the taxpayers' difficulty or doubt in paying the tax and that they cannot be expected to meet the threshold.
The taxpayer, failed to disclose to the Court that both KRA and the Honorable Attorney General had declined to recommend the tax abandonment to the Cabinet Secretary National Treasury on the basis that the application for abandonment lacked legal basis.
KRA is committed to upholding the rule of law and ensuring that all taxpayers comply with their obligations. The Authority is confident that the High Court will carefully consider the facts presented and make the right decision in this matter.
Ag. Commissioner - Legal Services & Board Coordination