The High Court in Machakos has stopped Kenyans from paying the minimum tax to the Kenya Revenue Authority (KRA).
Justice Odunga said that, ‘… conservatory orders be and are hereby granted restraining the 2nd Respondent whether acting jointly or severally by itself, its servants, agents representatives or howsoever otherwise from the implementation, further implementation, administration, application and/or enforcement of Section 12D of the Income Tax Act, Chapter 470 of the Laws of Kenya as amended by the Tax Laws (Amendment) (No. 2) Act. 2020 by collecting and/or demanding payment of the Minimum Tax pending the hearing and determination of this Petition”.
The case was filed by Kitengela Bar Owners Association.
The Finance Act, 2020 introduced the minimum tax, effective 1 January 2021. The minimum tax (imposed a rate of 1% of gross turnover) is payable when the amount of a taxpayer’s instalment tax payable is less than the amount of the minimum tax.
Minimum tax has faced a lot of resistance from Kenyans who believe it is being implemented at a time when corruption is too high.
Previously, companies that run at a loss never paid any taxes.
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