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KRA to Appeal Conservatory Order Suspending Implementation of Minimum Tax

Nairobi Hospital
Times Tower, the building that houses the KRA. [PHOTO/ COURTESY]

The Kenya Revenue Authority (KRA) has announced that it will appeal a decision made by the High Court to suspend the implementation of  Minimum Tax.

The order was issued following a petition filed by Isinya Bar Owners Association and Kenya Association of Manufacturers in the High Court in Machakos.

The orders were issued on Monday, April 19, temporarily suspending KRA’s implementation of the Minimum Tax pending the hearing and determination of the Petition.

“KRA successfully sought for an early hearing date and the Court has agreed to hear and determine the matter before the second instalment falls due. Additionally, KRA is putting in an Appeal and an Application for Stay to the Court of Appeal,” said KRA Commissioner for Legal Services and Board Coordination Mr Paul Matuku.

“KRA shall abide by the Ruling issued by the Court and await the outcome of the main Petition slated for hearing on 19th May 2021.”

Read: KRA Experiencing Downtime In Online Tax Filing Systems

Those who have already paid the tax will retain it as a credit in their iTax ledger pending the outcome of the Petitions.

The minimum tax, which was introduced through the Finance Act 2020 in January last year is a base income tax applied to all persons whether they make a profit or not. Its goal is to net in more enterprises into the tax bracket despite their financial status.

The Finance Act 2020 stated that the minimum tax would be payable where it exceeds the instalment tax payable to KRA .It was to be made on or before 20th of each period ending on the fourth, sixth, ninth and 12th month of the year of income.

The Kenya Association of Manufacturers last year raised an alarm, saying the new tax would have a negative impact on businesses and deter startups. The association further said that it would lead struggling businesses to premature closure as a result of increased cash flow constraints and consumer costs.

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Written by Francis Muli

Follow me on Twitter @FmuliKE. Email francis@kahawatungu.com

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