A couple has been saved from remitting Ksh9.3 billion to the Kenya Revenue Authority (KRA), less than a week after they were ordered to pay the tax as penalties and accrued interests.
High Court judge Justice David Majanja directed Paleah Stores Ltd in Embu, owned by Patrick Njiru Kuria and his wife to pay Ksh10 million as a condition to stop KRA from collecting the money.
The tycoon had lamented that the amount of money KRA wanted to be remitted was outrageous and his business would collapse if he submitted the cash. He added that he had already paid Ksh17.5 million to KRA as part of the outstanding tax.
He also argued that KRA was ill-advised and irrational and had failed to consider the business incurred Ksh 1.58 billion operating. Collecting taxes should not discourage taxpayers from carrying on with their business.A court in Kenya.File
"Since the factual circumstances relating to the appellant’s business are not in doubt and taking all facts into consideration, an order for payment of a reasonable amount would be appropriate in the circumstances.
It is in no doubt that if this amount is enforced at once, the appellant will close down with the attendant consequences. KRA has not disputed the fact that the appellant is a trading company and a going concern," Majanja ruled.
However, Majanja ordered the couple to pay Ksh 10 million within two weeks failure to which he will allow KRA to collect the Ksh 9.3 billion it demanded.
A Tax Appeals Tribunal had ordered Paleah Stores Ltd in Embu, owned by Patrick Njiru Kuria and the wife to pay Ksh 1,361,746,295 corporation tax and Ksh 7,891,387,842 in value-added tax (VAT) inclusive of interest and penalties. KRA penalised the businessman after accusing him of failing to pay tax for six years, between 2008 and 2014.
The case had dragged in court since 2017 when the tycoon filed the appeal against the taxman. Commissioner, Legal Services and Board Coordination Paul Matuku said that KRA received a tip-off from a concerned citizen before it sought the trader's bank statements and details from his suppliers.
The tribunal ruled that Paleah owners had not complied with its statutory obligations of storing and availing proper records for tax analysis forcing KRA to reach out to banks and suppliers
The tribunal threw out an appeal by the tycoon, forcing him to proceed to the High Court.Inside the precincts of a Kenyan courtFile
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