KRA fights order in Sh10m tax dispute

The Kenya Revenue Authority (KRA) is seeking an order temporarily suspending its bid to recover Sh10 million tax due from bank accounts belonging to two businessmen set aside.

In the alternative, the KRA wants the court to order Bipinchandra Raihod and Bhupendra Raihod, trading as Pennyways, to furnish security in form of a cash deposit towards outstanding taxes or a bank guarantee of the amount alleged to be tax due.

The taxman argues that the court order granted to the businessmen earlier this month was obtained after they misrepresented the facts in dispute.

“The applicant (businessmen) has not pursued all available statutory remedies of appeal mechanisms as provided under the law and is therefore undeserving of the prerogative orders,” the application states in part.

According to the KRA, seeking to suspended its decision is an attempt by the businessmen to circumvent due process of revenue collection as stipulated by the law.

Ms Asha Salim of KRA’s debt enforcement accounts management and refunds division said the order in favour of the businessmen is prohibiting the agency from collecting customs duty.

“There is evidence that KRA sent demand notices to the applicant (businessmen) demanding the said taxes which they failed to respond or object to and yet the taxes remain unpaid to date,” said Ms Salim.

The KRA had written to the bank directing it to pay Sh10 million from the accounts of the two businessmen, alleged to be tax due, but Justice Eric Ogola issued a stay restraining the move. The businessmen claimed they were not aware on what basis the KRA wrote the letter dated May 20 and that they are in the dark with no communication from the agency.

They also deny owing the alleged money on account of duty and say that the dispute has not been heard by any impartial or independent tribunal.

But KRA says the businessmen are aware that the debt exists because the verification of the goods imported was done by the taxman’s officers at their premises.