Economy

KRA's tax case against Joho freight firm now to be heard in Sept

kra

The Kenya Revenue Authority headquarters at Times Tower in Nairobi. FILE PHOTO | NMG

A suspended case in which the Kenya Revenue Authority (KRA) is demanding Sh90 million in taxes from a firm linked to Mombasa Governor Hassan Joho will now be heard in September.

Justice Eric Ogola directed KRA and Portside Freight Terminal Ltd to file and serve their submissions within 14 days.

The case was to be heard on Thursday but was taken out of the case list, and parties will now highlight their submissions on September 18.

Justice Ogola had in March barred 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.

READ: Joho freight firm in Sh90m tax dispute

The freight company had been allowed to continue operations as it applied for orders against KRA.
The freight firm, which says it does not admit the Sh90 million taxes allegedly 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 dated February 3.

Four years

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

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

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

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.

On its part, KRA said the freight firm's total tax liability amounts to Sh90 million, due from the last day of the fourth month after the end of every year of income or the company’s accounting period.

READ: Taxman sued for detaining firm's rice consignment

Tax statutes

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 account 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.

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