KRA To Appeal High Court Ruling On Minimum Tax

by Lawyer Alex

The Kenya Revenue Authority (KRA) Monday said it will move to the Court of Appeal to challenge the High Court ruling that nullified the Minimum Tax provision on companies’ annual sales.

KRA Commissioner for Legal Services and Board Coordination Paul Matuku, through a statement to newsrooms,  said the  High Court cannot give it provisions to improve on tax policies in the country.

“The Kenya Revenue Authority respectfully disagrees with the findings of the Court and will prefer an appeal to the Court of Appeal to challenge this finding, this is to ensure that KRA continues to review and improve on tax policies in order to reduce the tax burden while ensuring that every citizen contributes their fair share of tax,” he noted.

High Court Judge Justice George Odunga, in his ruling, said that the tax law is loss-making to businesses faulting the levy as a way of catching tax cheats which in turn affects the trading performance.

The minimum tax has a potential of not only subjecting the people whose businesses for whatever reason are in loss-making positions to pay taxes from their capital rather than profits. Those who can pay taxes from their profits will not have their capital affected while those generally in loss-making positions will be sacrificed at the alter,” he added.

Odunga noted that minimum tax was unconstitutional for subjecting taxpayers to double taxation and was punitive in nature.

The suit was filed at the Machakos High Court by Kitengela Bar Owners association against the National Assembly, the Kenya Revenue Authority, and Attorney General Paul Kihara.

Under the minimum tax which was introduced by Treasury Cabinet Secretary (CS) under the Finance Act 2020, businesses were to be charged at the rate of one percent of the gross turnover beginning 2021.

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