Taxman wins Sh2.3b debt case

Kenya Revenue Authority (KRA) Commissioner-General James Githii Mburu. [File, Standard]

The Kenya Revenue Authority (KRA) has won a case against a Dubai firm seeking to stop the collection of Sh2.3 billion in tax debts.

The firm had sought orders to stop KRA from collecting tax debts from its affiliate entity registered and operating in Kenya.

The High Court in Nairobi, however, ruled that the suit by United Arab Emirates (UAE) registered firm, Suzan General Trading JLT was not properly before Court because the company had failed to comply with the provision of Section 52 of Tax Procedures Act.

Justice Pauline Nyamweya struck out a Judicial Review petition filed on July 28, 2018, by UAE registered firm.

The court said the matter ought to have been determined by the Tax Appeal Tribunal, thus Suzan Duty-Free had not exhausted the remedy provided in the law before filing the case.

The Court held that the issues and reasons why the case was brought before Court were not capable of being resolved by way of judicial review proceedings.

Suzan General Trading JLT had sought among others - an order to stop KRA from enforcing the warrants and distress notices issued on July 9, 2018, in respect of a tax debt owed by its affiliate firm Diplomatic Duty-Free Ltd (DDF) amounting to Sh2.3 billion.

The company also sought to stop KRA from interfering with its operations on account of the debts owed to the tax authority by DDF, and from issuing and enforcing any further proclamations on its property concerning a debt due to the KRA by DDF. 

The UAE-based firm wanted to stop a court order directing KRA to lift the proclamation dated July 9, 2018, issued by Keysian Auctioneers in respect to its property.

Suzan Duty-Free contested the proclamation notice, arguing that it was unreasonable, noting that the goods proclaimed belonged to it and not DDF.

The firm argued that KRA was illegally and unlawfully causing it to pay debts that were for DDF that is a distinct entity. The ruling gives KRA the nod to enforce the collection of the taxes due.