Oil distributor TotalEnergies has rushed to court to block Kenya Revenue Authority (KRA) from attaching its accounts over tax arrears amounting to Sh329.5 million.
The multinational says in a suit filed before the High Court that the taxman will attach its accounts at KCB and Stanbic — crippling its operations — unless stopped by the court.
The company says the KRA wrote to its bankers on May 31, demanding payment of the amount but the oil company argues that the move is deliberate and meant to sabotage its operations because its application for waiver, made more than five years ago, has never been addressed.
“Unless this honourable court considers and intervenes urgently in the circumstances, the operations of the petitioner will be grounded as funds held with its bankers will be frozen as a result of the respondent’s decision and agency notices issued in excess and abuse of their administrative powers,” said its lawyer Waweru Gatonye in the petition.
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Court documents show that the KRA and the oil firm entered into an alternative dispute mechanism in 2016 following a tax dispute.
The company says the parties allegedly agreed that TotalEnergies pay the principal amount of Sh405.9 million in one installment.
TotalEnergies was also free to apply for a waiver on penalties and interest, which it did by asking for a 100 percent waiver.
The company says the application for waiver was never addressed and all was well until May this year when the taxman demanded payment and issued notices to the firm’s bankers.
When the company sought answers on its application for the waiver, the KRA referred the company to the Treasury Cabinet secretary for consideration.
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Mr Gatonye says the notices were issued without communicating to TotalEnergies or notifying the firm.
“In light of section 51(11) of the TPA, it is clear that efficiency in rendering decisions on tax objections and applications is critical under the Act and having failed to render a decision on the waiver sought within a period of 60 days, the petitioner’s application for a waiver can only be deemed to have been accepted,” Boniface Abala, legal manager.
Mr Alaba says the failure to notify the company in writing of the objections is in breach of the Act.