UK security firm to settle Sh44m tax row out of court

A British security company which wants a decision by the Kenya Revenue Authority (KRA) directing a bank to transfer Sh44 million from its account to an another held by the State agency quashed says negotiations have started to settle the case out of court.

XFOR Security Solutions, through its lawyer Ann Kaguri, told the court that it has commenced negotiations with KRA and has scheduled a meeting to iron out the issues out of court.

“Parties agreed to start the step (of negotiations) first, we feel we can resolve the matter amicably,” Ms Kaguri told Justice Eric Ogola.

XFOR is accused of failing to pay taxes, but says that the decision by the commissioner of domestic taxes directing its bank to freeze its accounts was made without regard to rules of natural justice as it was not accorded any hearing.

In its application at the High Court in Mombasa, the company terms the decision by KRA as arbitrary as it was not given any particulars of the claims before an agency notice was issued.

“The commissioner of domestic taxes did not exhaust all the machinery provided by law,” argues the security company.

Through its officer serving at the domestic taxes department Robert Ongoma, KRA says that following the commencement of criminal proceedings against the company, XFOR security wrote to KRA with a view of resolving the case out of court.

“I am aware that under Section 108 of the Tax Procedures Act 2015, collection and payments of taxes is not affected by the pendency of criminal proceedings commenced under the Act,” said Mr Ongoma.

He said that the application by the security firm is best ventilated at the Tax Appeals Tribunal since KRA’s decision amount to tax decisions in accordance to section 3 of the Tax Procedures Act.

The case has been fixed for mention on September 30 to record settlement.