BY SAM ALFAN.
Economist David Ndii has petitioned the high court seeking to overturn a decision allowing Kenya Revenue Authority from demanding tax amounting to Sh2.8 million from him.
Under certificate of urgency, Ndii wants the court to allow him
deposit a bank guarantee of half-a-million shillings as a condition to stay the order saying KRA may execute the decision and start the process to recover the taxes, rendering his appeal useless.
The economist has been battling with KRA over alleged unpaid taxes and in March last year, Tax Appeal Tribunal ruled in his favour by dismissing the assessment conducted by the Commisisoner of Domestic Taxes.
But KRA appealed against the decision and on March 17 and Justice David Majanja overturned the decision, forcing Ndii to head to the Court of Appeal.
He moved back to the High Court seeking the suspension of the decision, pending the determination of his appeal.
“The respondent(Ndii) herein is able and willing to furnish security in form of a bank guarantee of Kshs500,000, pending appeal as may be directed and has moved to court timeously,” reads the court papers.
The Tax Tribunal chaired by Josephine Maangi had in March last year dismissed the assessment by KRA and quashed a demand of Sh 2,807,758.
In the ruling the tribunal noted that although Ndii did not contest the assessment on VAT, KRA was wrong by failing to notify him through writing, which is a mandatory requirement.
The tax assessment was done in September 2015.
According to court documents, KRA conducted the assessment using his banking documents. The law allows taxman to seek information from third parties, such as banks, from persons and businesses suspected of evading tax.
The Tribunal heard that it conducted a tax audit on Dr Ndii’s tax affairs for years between the years 2011 to 2015. And after presenting his documentation, KRA issued additional assessment for income between 2013 and 2015.
The taxman alleged that he made income tax and VAT totaling to Sh11,395,595.
And according to KRA, Ndii met the threshold of registering VAT but failed to do so as his income surpassed Sh5 million.
Traders who have a turnover of Sh5 million and above per year, are required to register taxable supplies for VAT, collect and remit it to KRA.
But as the matter was pending, Ndii and KRA settled the income tax dispute, leaving the VAT matter to be determined by the Tribunal.
The economist objected the assessment and in January 2018, he gave out his credit card and business expenses as well as mortgage interest allowable to business.
KRA later reviewed the assessment downwards and demanded Sh2.8 million for the years 2011 to 2015.
