BY BUSINESS DESK.
Cigarette maker, Mastermind Tobacco want the taxman restrained from demanding unsubstantiated arrears that have amount to Sh1.9 billion.
The cigar company says it has not made such sales for the last three weeks to attract the tax demand from KRA.
Mastermind Tobacco has sued the Commissioner of Domestic Taxes over almost Sh1. 9 billion said to be unpaid arrears of excise duty, VAT and PAYE.
The company argues that on the August 31, 2018, the commissioner of taxes sent a demand notice for the period between April-July 2018 stating that the company owned KRA the said amount.
Three weeks later the company alleged that the tax man without explanation on how the amount was arrived at demanded Sh1.9 billion.
Mastermind Tobacco says KRA has proclaimed all the assets and if executed it will permanently destroy their business.
KRA’s demand is unjustified, unlawful and unreasonable for demanding taxes that are not due.
“The applicants business will be irretrievable ruined as the auctioneer appointed by KRA has proclaimed all its assets,” reads court documents.
The manufacturer of cigarettes says the decision to demand the said amount constitutes substantive unfairness amounting to an abuse of excess of the powers.
Robert Mugambi Mutuma, the company secretary also accuses the tax man of failure to afford them an opportunity to respond to the said notice adding that efforts to resolve the matter reasonably have not been successful as KRA is unable to justify the said money that is demanded.
“The respondent is acting outside the law in purporting to inflate the amount of excise duty and VAT payable,” Mastermind tobacco says.
The company further claims that the decision to demand tax arrears amounting to over 1.9 billion shillings lacks any foundation in law and is therefore unconstitutional.
