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Kenya Revenue Authority (KRA) ordered to pay Rwandese businessman over Sh200m

BUSINESS
By Kamau Muthoni | August 12th 2015

Kenya Revenue Authority (KRA) will have to pay over Sh200 million as damages to a Rwandese businessman whose trucks were held at a police station for close to four years.

The taxman suffered a blow, twice, both at the High Court and Court of Appeal as it lost the case in which Hibamana Hemed was awarded the lump sum amount as a relief for losses he incurred when his transit lorries were held at Tigoni Police Station.

The High Court slapped the tax agency with the penalty in 2006 prompting an appeal which was also decided in favour of Mr Hibamana.

KRA is to pay him $60 000 for every month that the two lorries stayed at the police station meaning that it will part with $2.76 million (about Sh192m at 2006 exchange rate) for the 46 months that the vehicles remained grounded.

The lorries were held at the police station on October 28, 1998 and were released on August 2002. The taxman was also slapped with further Sh5 million which will attract an 18 per cent interest from 2006 until the monies are paid in full for general damages.

“Appellant (KRA) is ordered to pay the first respondent the following; $60,000 per month or its equivalent in Kenya shillings with an exchange rate for the dollar to the shilling as per the date of the judgment of the High Court calculated from the October 28, 1998 to August 2002 when the trucks were released,” Appeal Court judges Wanjiru Karanja, Philomena Mwilu and Festus Azangalala said.

From the pleadings and evidence adduced before the court the man was contracted to transport two containers containing second hand clothes from the port of Mombasa.

Transport business

It transpired that Hibamana was a Rwandese national engaged in the transport business across the borders from Mombasa to Kigali, Congo, Uganda, Tanzania, and other great lakes landlocked countries.

The cargo was being cleared by a customs agent as confirmed by a KRA official at Isebania border point. However, when the trucks reached Mai Mahiu, one of them developed mechanical problems and the driver parked it off the road.

Police officers warned them of insecurity in the area at night and had the trucks voluntarily driven to Tigoni Police Station. They were then impounded for allegedly transiting unaccustomed goods.

The three judges noted that: “In the present matter, the fine that would have applied under the Act was Sh100,000 at the time, and the first respondent (Hibamana) offered a security of Sh20 million to have his trucks released, which the appellant (KRA) neglected and or refused to accept. This cannot have been in good faith, only be construed to have been in bad faith, and the Act cannot have been intended for the purpose that the appellant used it.”

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