The High Court has dismissed an appeal by Mwalimu National Sacco seeking to quash a tax demand of Sh44.9 million.
Justice David Majanja dismissed the petition stating that an appellate court dealing with matters of law cannot engage in a factual exercise as it will be usurping the powers of the tax appeals tribunal and also exceeding its own jurisdiction.
The Sacco was slapped with the demand in 2018 arising from Pay As you Earn (PAYE) and corporate tax. The initial amount demanded by KRA was Sh1.2 billion but the tribunal struck out a chunk of the amount leaving Sh44.9 million.
“I find that the appellant (Mwalimu) is inviting the court to look at the evidence again and come to a different factual conclusion to that of the Tribunal and as a consequence, conclude that the computation therein tallied with the payments made to the commissioner and that the same was sufficient to absolve the appellant,” the judge said.
KRA said it carried out reconciliation on taxable expenses on the Sacco and concluded that some of the expenses were not subjected to tax as required.
It then sent the assessment, which was objected to by the Sacco and the matter was referred to the tribunal.
The Sacco said it provided evidence of all its PAYE tax payments made to KRA from January 2013 to December 2016.
However, the court heard that the tribunal only considered a table drawn by the Sacco and submitted it, without looking at the supporting documentation for the information.
On corporate tax, the judge said the KRA is still open for Sacco to follow up on the expenses through the prescribed procedure.