Mastermind seeks to settle Sh1.9bn tax row this month

Times Tower
Times Tower, Kenya Revenue Authority headquarters. FILE PHOTO | NMG 

Mastermind Tobacco will be seeking to start this year on a better note after a dispute with the Kenya Revenue Authority saw it slapped with a Sh1.99 billion tax demand.

The cigarettes maker, owned by business tycoon Wilfred Murungi, on December 17 asked the court to give it more time to finalise the talks that have been ongoing since October.

Lawyers representing Mastermind and the KRA told the High court that they had made progress in the negotiations and asked for more time to reach a consent.

This is the fourth time they were seeking more time since the start of the out-of-court talks.

Mastermind Tobacco had sought court protection after the KRA sent auctioneers to seize its assets over the company’s failure to pay the tax arrears.


“Parties are still negotiating; we ask for mention in January 2019,” Mastermind’s lawyers told the court, a position which the KRA’s counsel agreed with.

Justice John Mativo directed the suit to be mentioned on January 23 for record of the consent, and extended court orders stopping the KRA from seizing or auctioning Mastermind’s assets.

Mastermind, in the court documents, says the taxman sent a notice of distress on September 19 and instructed auctioneers to attach its assets with a view to recovering the colossal sum.

Mastermind, which makes the Supermatch brand of cigarettes, said it is apprehensive that unless restrained, the auctioneer might attach its entire assets and destroy its business permanently.

Leakey’s Auctioneers had moved in and given Mastermind 10 days to settle the arrears or have its property auctioned. Mastermind went to court seeking orders suspending the demand, pending determination of an appeal it has filed at the Tax Tribunal.

The cigarette firm argues that although the tribunal has the power to suspend the demand, it lacks quorum because only the chairman is in office following the expiry of other members’ tenure in March.

Mastermind has accused the taxman of failing to give it an opportunity to be heard, noting that the demand notice was received on August 31, 2018 and the attachment of its property commissioned three weeks later.