Economy

Court stops KRA from demanding Sh90m from Joho freight firm

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Mombasa Governor Hassan Joho. FILE PHOTO | NMG

A demand for Sh90 million taxes allegedly owed to Kenya Revenue Authority by a firm associated with the family of Mombasa Governor Hassan Joho has been suspended by the High Court.

Judge Eric Ogola suspended the taxman from demanding or issuing any notices for the taxes until the determination of a case filed by Portside Freight Terminal Ltd or further orders are issued.

The freight firm, which has not admitted the Sh90 million taxes alleged owed, wants 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 KRA.

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

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

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

It is also seeking for an order to compel 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.

Tax liability

On its part, KRA said the freight firm total tax liability amounts to Sh90 million that 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 Mr Jesse Kamau, a supervisor at its Investigations and Enforcement Department, KRA further said that 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.

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

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