The Kenya Revenue Authority (KRA) has suffered a blow in its pursuit of Sh787.87 million in taxes from a local trader who operates a fuel station and provides transport services for the United Nations, after a tribunal said the demands were erroneous.
The Tax Appeals Tribunal (TAT) barred the KRA from demanding the money from Abdi Amin’s businesses and instead directed the taxman to conduct fresh audit of the trader’s accounts.
The tribunal also directed KRA to resolve the irregularity on the use of Mr Amin’s national ID number to register two Personal Identification Numbers (PIN) saying that the irregularities cast doubts on the proper tax records for the trader.
The Kenya Revenue Authority (KRA) has suffered a blow in its pursuit of Sh787.87 million in taxes from a local trader who operates a fuel station and provides transport services for the United Nations, after a tribunal said the demands were erroneous.
The Tax Appeals Tribunal (TAT) barred the KRA from demanding the money from Abdi Amin’s businesses and instead directed the taxman to conduct fresh audit of the trader’s accounts.
The tribunal also directed KRA to resolve the irregularity on the use of Mr Amin’s national ID number to register two Personal Identification Numbers (PIN) saying that the irregularities cast doubts on the proper tax records for the trader.
The taxman registered Mr Amin on July 6, 2007 but issued the same PIN to Abdi Ahmed on June 17, 2019.
KRA had demanded Sh512.92 million for income tax and Sh274.95 million for Value Added Tax in revenues generated from his petrol station and transport services rendered to the United Nations for the period 2016 to 2019.
The taxman had hinged the demands on a review of the trader’s iTax and statements of his four accounts from the Gulf Bank. KRA in its push said that Mr Amin had filed tax returns from his businesses in 2015, 2016 and 2017 but filed nil returns the following year, after receiving over Sh5 million in payments from his businesses. Mr Amin disputed the demands and requested for four months to provide documents supporting his objection.
The KRA however rejected the trader’s request on June 30 last year, setting the stage for enforcement action that include property seizure and agency notices to recover the money if he failed to pay the taxes.
“The objection decision dated the 30th June, 2020 is hereby struck out, the Respondent shall be at liberty to undertake any tax audit and assessment on the affairs of the appropriate Appellant,” TAT said in its ruling.
“It may be expedient in the circumstances of this matter for the Respondent to revisit and undertake a more in-depth and focused tax audit and assessment.”
The ruling is the latest case that the KRA has lost at the tribunal, dealing a blow to its efforts to plug its revenue shortfalls in an economy where the Coronavirus disruptions have hurt revenue collections from the payroll and corporates.
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