BY SAM ALFAN.
Nairobi City County Government has obtained orders prohibit Kenya Revenue Authority from enforcing attaching or freezing its bank accounts over alleged tax owed to the taxman.
In a petition certified urgent, the county obtained temporary orders suspending the agency notices dated April 12, September 10 and October 23 ,2019 issued the agency to several among them Equity Bank, Cooperative bank, Standard chartered bank, National Bank, Barclays Bank, Kenya Commercial Bank, Commercial bank and Central bank in respect to funds due and payable to KRA.
Justice Pauline Nyamweha issued the order prohibiting Kenya Revenue Authority from enforcing the agency notices dated April 12, September 10 and October 23,2019 or issuing any further agency notice to Nairobi City County Government.
“Pending inter parties hearing , the implementation of the agency notices dated April 12, September 10 and October 23,2019 issued to Nairobi County government by Kenya Revenue Authority with request to funds due and payable to the county government is hereby stayed”, ordered Judge Nyamweha.
The county government through lawyer Cecil Miller further wants an alleged tax dispute settlement agreement dated September 19, 2019 purportedly entered into between some officials of county government and KRA null and void.
City hall wants the purported agreement quashed since it was entered without following the laid down procedures and requisite approval and consent of the county government finance committee.
Governor Mike Sonko’s administration said the county government plays key and crucial public roles and functions to the residents of Nairobi including but not limited to garbage collection, street lighting, water and sanitation, provision of health care services and other crucial services and function assigned to it.
He also said through lawyer Cecil Miller that the county also pays huge debts mostly inherited from its predecessor, the defunct county council and most of these debts have been ordered by courts to be settled, default to which the officers of the county government risk being jailed for disobedience of the court order.
“The need for free cash flow within the county government can thus not be gainsaid,” said the county.
“County government receives money from the national government to supplement its budget as constitutional required. The money is usually transferred, disbursed, released to the county in monthly installments by the treasury “, added the county government.
Court documents said the National treasury is obligated under Article 255 (3) of the constitution not to stop or withhold the transfer of these funds to the county government unless in very exceptional circumstances and subject to requirements imposed by clauses (4) to (7).
The county government added that the monies sought to be attached, stopped or recovered by the tax agency from the county government are monies from the county revenue fund and county exchequer accounts whose stoppage, withdrawal or interference is strictly governed by the above mentioned law.
It added that the said notices by the agency is abuse of due process since similar agency notices dated December 6,2016 and March 27, 2017 had been issued by the agency Central bank and other two banks and same were quashed by the court.
Court directed the county government to serve Kenya Revenue Authority with their substantive notice of motion within 14 days .The case will be heard on November 20
