BY SAM ALFAN.
Kenya Revenue Authority has suffered a major over it bid to collect billions from Keroche Breweries Limited over alleged tax recovery.
This is after High court barred the tax agency from collecting over 9,116,835,985.00 billion shillings from Keroche Breweries after tribunal dismissed the company appeal.
Justice Majanja suspended the implementation of Tax Appeals Tribunal judgement that directed KRA to collect Sh.9 billion from Keroche Breweries limited.
“A temporary order of stay be and is hereby issued staying the enforcement of the judgement of the Tax Appeals Tribunal delivered on march 9, 2020 in tax appeal NO. TAT214/2015 as (consolidated with TAT No.38 and 97 of 2017)”, ordered Majanja.
The court further stopped the enforcement commenced by KRA through agency notice issued to Equity Bank Limited on March 11, 2020 or any other agency notices issued to any of Keroche’s bankers or debtors which Keroche may have not been aware of at the time of making this application be stayed and KRA whether by themselves or agents from taking any further steps to collect any money pursuant to the said agency notices pending further orders of the court on March 16,2020.
High court further suspended a notice by KRA to Equity bank to freeze Keroche’s bank accounts to recover the alleged taxes amounting to 9 billion.
“Pending the hearing and determination of the application, the agency notice issued on Equity bank dated March 11, 2020 is hereby lifted and KRA by itself or its officers, employees of agents is hereby stopped from taking any step to collect any money pursuant to the said agency notices issued to Keroche Debtors pending further orders of the court.” The court ruled.
This is after Keroche Breweries Limited filed application in court seeking to suspend the implementation of Tax Appeals Tribunal judgement delivered on March 9, compelling the company to pay 9 billion tax.
Keroche urged the court to temporarily suspend the implementation of the judgement that KRA is claiming shilling 9,116,835,985.00 billion pending hearing and determination of the application.
An order of stay be issued staying the enforcement of the judgement of the Tax Appeals Tribunal delivered on March 9,2020 pending hearing and determination of the case.” Keroche urged.
In the court documents, Keroche Breweries urged the to suspend KRA notice to Equity Bank dated March 11,2020 and any other agency notice issued on Keroche’s bankers and debtors be lifted and KRA stopped from taking any steps to collect any money pursuant to the said agency notices issued to the Keroche’s debtors.
The Naivasha based brewer argue that the Tax Appeal Tribunal did not read the entire decision as it only read the conclusion and the judgement has not been available to the company despite asking for it.
Keroche is apprehensive that Kenya Revenue Authority will issue other notices on its other bankers and may take additional enforcement action and the agency action will greatly jeopardize the company’s appeal and render it an academic exercise.
The company added that Keroche’s bankers are legally obligated to remit the sums set out in the agency notices unless there is a court order stopping such remission.
” The sums claimed as taxes are significant and are disputed. If KRA is allowed to recover these sums , the company’s operations will grind to a halt and it will cease existing as a going concern. ” Say’s Keroche.
The company has numerous contractual obligations with third parties and these obligations will not be met if KRA is allowed to enforce the judgement of the Tribunal. “This will expose the Keroche Breweries to suits for damages for breach of contracts.” Keroche claims.
