Don’t close down people’s businesses over tax disputes, court tells KRA
High Court Judge Weldon Korir has warned Kenya Revenue Authority (KRA) against killing local companies in the name of collecting taxes.
The judge accused KRA of killing local businesses over alleged failure to pay taxes which in return has affected many households in the country.
Justice cautioned that if KRA continues to scare local businesses, it will soon go bankrupt and fail to meet its tax collection targets.
“When KRA continues to kill businesses in the guise of collecting taxes, it becomes an undertaker and will itself eventually die since its survival depends on the existence of income-generating businesses from which it can collect taxes,” Justice Korir rule.
The judge issued the warning at the time when he was ordering the taxman to immediately reopen Mount Kenya Breweries Limited which was shut down due to license-related issues.
Korir noted that though KRA is justified to collect taxes and companies are obliged to declare and remit taxes, closing down their businesses and halting their operation was not the right way to deal with tax evasion.
He, however, clarified that his ruling did not deter KRA from pursuing any outstanding and future tax liabilities from the company.
“In ensuring that legitimate businesses do not operate over the closures, KRA acts against its core mandate which is to collect taxes since it cannot collect taxes from businesses that are not operational,” he ruled.