Relief For Businesses As High Court Stops Minimum Tax

The Kenya Revenue Authority (KRA) received a blow in its efforts to implement the controversial Minimum Tax after the High Court temporarily put a stop to it.

KRA had already rolled out a plan to start deducting a 1 percent Minimum Tax from businesses that SMEs had described as “punitive” and “set to hurt” the already ailing economy.

Minimum Tax was introduced in 2020 and is a base income tax that was set to be imposed on all individuals whether their business makes a profit or a loss.

Contained in the Kenya’s Finance Act of 2020, the Minimum Tax is stated as the amount that was to be paid to KRA as the “amount payable where it exceeds the installment tax payable to KRA.”

While issuing the ruling, Justice George Odunga, said that the implementation of the Minimum Tax would only serve to hurt businesses that have already been affected by the Covid-19 pandemic that is still sweeping across the globe.

Isinya East Sub-County Bar Owners Association had moved to court to challenge the move by KRA to deduct Minimum Tax. The High Court has since blocked the implementation of the Minimum Tax until the issued raised by the association are heard and determined.

Kenya Association of Manufacturers is also against the Minimum Tax.

More to follow.