The Kenya Revenue Authority (KRA) has begun the legal process to challenge a High Court order restricting the collection of Kes8.2 billion in taxes owed by Kenya Breweries Limited.
The High Court issued the order on April 28, 2023.
The National Treasury and Economic Planning allowed the KBL to stop collecting the tax on January 22, 2021.
On March 24, 2023, the approval was, however, rescinded.
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Therefore, the tax demand is based on the Cabinet Secretary for National Treasury and Economic Planning revoking the approval.
The Tax Procedures Act's Section 37, which deals with tax relief in circumstances where the Commissioner is unsure or unable to reclaim unpaid tax, was misinterpreted, leading to the High Court's decision.
The KRA claims that the section has nothing to do with the taxpayers' inability or uncertainty in meeting the criteria and that they cannot be expected to do so.
The taxpayer failed to disclose to the Court that both KRA and the Honorable Attorney General had declined to recommend the tax abandonment to the Cabinet Secretary National Treasury because the application for abandonment lacked a legal basis.
KRA is committed to upholding the rule of law and ensuring all taxpayers comply with their obligations.
The Authority is confident that the High Court will carefully consider the facts and make the right decision.
