The Kenya Revenue Authority (KRA) will be filing an appeal to challenge the decision by the High Court of Kenya that declared the Minimum Tax unconstitutional.
On Monday, Justice Odunga declared section 12D of the Income Tax Act, the section that introduced the Minimum Tax as unconstitutional.
The case had been filed by the Kitengela Bar Owners Association who termed the implementation of the tax provision as retrogressive, selective, and a danger to the economy.
KRA has come out, guns blazing, saying it “respectively disagrees with the ruling by the High Court.”
“The Kenya Revenue Authority respectively disagrees with the findings of the Court and will prefer an appeal in the Court of Appeal to challenge this finding,” said KRA in a statement.
The Kenya Association of Manufacturers (KAM) welcomed the ruling saying it was an important milestone towards safeguarding the ease of doing business in Kenya.
KAM had also filed a petition against the provision of the Minimum Tax in Nairobi and said that the Association will remain steadfast in championing a better business environment in the country.
“This historic decision by the courts today provides much-needed relief to businesses that continue to strain under the weight of over-taxation and unpredictability in the country today,” said KAM.
The COVID-19 pandemic has hit hard on the majority of Kenyan businesses. Millions of businesses have shut down and more than a million Kenyans lost their jobs.
The implementation of the Minimum Tax meant that those firms making losses will have to part with at least 1 percent of their income as taxes, something that would have literally killed them.
As Kenya Revenue Authority prepares to head to the Court of Appeal, Kenyans across the divide are happy with the decision by the High Court, saying it is good for business.
Will the Court of Appeal overturn the decision by Justice Odunga?
Read More: High Court Declares Minimum Tax As Unconstitutional