KRA Rushes To Court To Appeal Minimum Tax Suspension

A day after the High Court, while sitting in Machakos, stopped Kenya Revenue Authority (KRA) from implementing the controversial Minimum Tax, KRA is moving to court to challenge the decision saying the train cannot be stopped.

The rate of Minimum Tax is 1 percent of the gross turnover of the company. What is the effective date for Minimum Tax? When is the due date for filing and paying Minimum Tax? The tax shall be paid in installments and shall be due on the 20th day of each period ending on the 4th, 6th, 9th, and 12th month of the year of income.

KRA did not disclose much on when it intends to appeal the ruling. Earlier, the taxman had asked the court to have an earlier ruling on the matter and the court agreed to hear and determine the case before the second installment is due.

The case was filed by the Kitengela Bar Owners Association against the National Assembly, KRA, and the Attorney General. A similar suit was filed in March by the Kenya Association of Manufacturers (KAM), Retailers Association of Kenya (RAK), and Kenya Flower Council (KFC) in Nairobi.

“KRA shall abide by the ruling issued by the Court and await the outcome of the main petition slated for hearing on May 19, 2021. Those who have already paid the tax will retain it as a credit in their iTax ledger pending the outcome of the petitions,” the statement reads.

Read More:

• High Court Did Not Suspend Minimum Tax For Good
• High Court Grants Injunction On Minimum Tax Case

Most stakeholders feel the Minimum Tax is punitive and will hurt businesses, especially SMEs that have already been affected by the Covid-19 pandemic. The 1 percent Minimum Tax is to be paid with or without profits by the business.

“Minimum tax should only be applicable where installment tax payable is lower than minimum tax and we expect this to be amended before the Bill is enacted,” said the experts from Deloitte.