Reprieve for Total in Sh329m tax dispute

Total Energies signage. [Elvis Ogina, Standard]

High Court has barred the Kenya Revenue Authority from attaching the accounts of oil marketer Total Energies Marketing Limited.

The taxman had gone after Total’s accounts after slapping it with a Sh329 million-tax demand. However, Justice Hewig Ong’udi directed the authority to hold on until the court issues its direction.

"Interim orders to issue in terms of prayer two of the notice of motion dated June 6, 2022, pending issuance of directions,” ruled justice Ong’undi.

Total’s lawyer Waweru Gatonye told the court that KRA had already attached its accounts maintained in Kenya Commercial Bank (KCB) and CFC Stanbic Bank. KRA is demanding Sh329 million.

The oil marketer narrated in court how KRA issued it with an agency notice dated May 31. “This was a calculated and deliberate act to ambush the petitioner and sabotage its operations," stated Gatonye.

Illegal and irregular

He continued: “The petitioner is reasonably apprehensive that unless the application for stay is heard urgently, the respondents will proceed with the threatened illegal and irregular action to recover the said sum of Sh329 million hereby causing the petitioner irreparable loss and rendering the petition filed herewith an academic exercise.”

The court heard that the oil marketer wrote to KRA on November 28, 2016, seeking a waiver. However, according to Total, the authority only responded last month that it had declined the request.

Gatonye stated that KRA did not give reasons for delay and rejection in its reply. According to him, Total wrote back to KRA seeking to have a correction of the decision.

The judge heard that the law requires KRA to render a decision on the waiver sought within a period of 60 days.

In the case, Total wants the court to block KRA from demanding the contested tax. At the same time, it is urging the court to block the authority from attaching its bank accounts.

Total accuses KRA of ambush. Total claims that in 2013, KRA issued it with a Sh3.3 billion tax assessment, to which the large tax payer objected.

In 2016, the two opted to resolve the issue through an alternative dispute resolution mechanism. According to the oil marketer, it mutually agreed to pay Sh405 million.