The Kenya Revenue Authority (KRA) has moved to the High Court to appeal against a decision by the Tax Appeal Tribunal to let go off economist David Ndii in Ksh2.8 million tax row.
In 2017, the taxman was in a tussle with Ndii over millions of tax arrears, including a Ksh8.4 million resulting from income tax and another Ksh2.9 million from VAT. The Ksh2.9 million was later reviewed down to Ksh2.8 million.
The Ksh8.4 million was settled out of court, while the Tax Appeals Tribunal threw out the case on Ksh2.8 million on grounds that the taxman used the wrong procedure to notify Ndii of his tax dues.
Tax Appeals Tribunal ruled that KRA had erred by failing to notify Ndii through writing, a mandatory requirement.
“The tribunal notes that there is no documentary evidence to show that the respondent (KRA) wrote to notify the appellant about the registration and cannot therefore retroactively demand for tax for the period under review,” it ruled.
Previously, Ndii had not registered as a VAT agent despite his business having annual gross earnings above Ksh5 million, according to KRA.
KRA went ahead and registered him, prompting the VAT demand.
The tax demands came at a time Ndii was a strategist for the opposition outfit National Super Alliance (Nasa). The outfit has since crumbled and most of the principals joined the government, but Ndii has remained an adamant critic of the Jubilee administration.
Even as Kenyans question the amount that will be used in the litigation by KRA, it will be perceived as a way being used by the government to silence its critics.