KRA takes minimum tax battle to Supreme Court – Business Daily
Times Tower in Nairobi, the headquarters of Kenya Revenue Authority. PHOTO | NMG
The Kenya Revenue Authority (KRA) has gone to the Supreme Court in a bid to overturn a ruling that declared the minimum tax unconstitutional.
The taxman filed a notice of appeal declaring intention to challenge last month’s decision by the Court of Appeal to uphold the ruling made by the High Court in 2021 that declared the tax an illegality.
The minimum tax is based on gross turnover and not gains or profits, and all businesses, even those in a loss-making position, are required to pay.
KRA’s push is aimed at protecting an estimated Sh21 billion that it hopes to raise every year through the minimum tax, in a bid to shore up its revenue collections.
Also read: KRA says refunding minimum tax cash a major challenge
The Court of Appeal last month upheld the High Court’s decision saying that the tax was based on a wrong assumption that all loss-making firms were evading taxes.
Read: Why Appeals rejected 1 per cent minimum tax
“Take notice that the appellant, Kenya Revenue Authority, being dissatisfied with the decision of the Court of Appeal given at Nairobi on December 2nd, 2022 intends to appeal to the Supreme Court against the whole of the said decision,” reads the notice filed at the Registrar of the Supreme Court.
The appeal comes barely a month after the taxman lost a petition that sought to overturn the High Court’s ruling and pave the way for collection of the billions every year from businesses even if they made profits.
The Court of Appeal added that the tax breached Article 201 on principles of public finance says that the burden of taxation shall be shared fairly.
