Firm loses bid to stop taxman from recovering Sh74m arrears

Friday, September 18th, 2020 00:00 |
KRA headquarters. Photo/File

Bernice Mbugua @BerniceMuhindi

A hospitality firm has suffered a blow after the Tax Appeal Tribunal declined to stop the tax master from collecting dues amounting to Sh74 million.

The tribunal dismissed Kisii Safari Inns Limited T/A Kaskazi Beach Hotel’s application for extension of time to file an appeal .

Safari Inns had failed to file an appeal within the legal time-lines and sought to have time extended, so that it can  challenge the enforcement measures Kenya Revenue Authority (KRA) initiated in collecting the outstanding revenue.

Demand letter

However, the tribunal noted that the firm did not dispute that it owed the said monies to KRA.

“Based on Section 52 of the Tax Procedures Act, the applicant’s appeal can only be valid if it pays the tax that is not in dispute.

Accordingly, the tribunal is unable to extend time for the applicant to file an appeal unless and until the amount is paid,” ruled the tribunal.

KRA had written demand letter to the firm on July 21, 2016 demanding Sh56, 963,635 tax arrears inclusive of interest for the period between January 2013 to March 2016.

It wrote another demand letter dated January 22, 2019 for outstanding arrears of Sh17,301,701 for the period between April 2016 to December 2018.

The firm disputed the tax balances  claiming they had  errors and that the taxman  had failed to update payments made during and after the periods in question.

Safari Inns argued that it wrote to KRA on May 17, 2019 to address the issue of correct tax arrears and payment plan,  including commencing partial payments in good faith, but KRA  refused to formally respond.

It  argued that its directors have had no direct control of the company’s activities when it was placed under receivership for 17 years and subsequently.

They sought orders restraining KRA from advertising for sale, offering for sale or selling by way of public auction their property as a consequence of Proclamation Notice issued on June 6, 2019 following the tax arrears.

KRA opposed the application on the ground that the taxes it sought to collect were based on the firm’s self-assessments.

It argued that the hospitality firm had admitted owing the taxes demanded but had failed to make payments.

More on News