UN trader wins Sh790m tax appeal claim against KRA

UN trader has won a 790 million tax appeal claim against the Kenya Revenue Authority (KRA) after a tribunal said the demands were inaccurate. The taxman was in pursuit of Sh787.87 million in taxes from the local trader who operates a fuel station. The trader also provides transport services for the United Nations. 

The ruling is among the case KRA lost at the tribunal, dealing a setback to its attempts to fill its revenue shortfalls. The economy is already facing covid-19 disruptions hurting revenue collections from corporates and payroll.

The Tax Appeals Tribunal blocked the KRA from demanding cash from Abdi Amin’s businesses. However, the tribunal asked KRA to conduct a fresh audit of the trader’s accounts.

The tribunal further directed the taxman to resolve the errors on the use of Amin’s national ID to register two Personal Identification Numbers stating the irregularities cast doubts on the precise tax records for the trader.

KRA enrolled Mr. Amin on July 6, 2007, but issued the same PIN to Abdi Ahmed on June 17, 2019.

The taxman had demanded Sh274.95 million for Value Added Tax and Sh512.92 million for income tax in revenues generated from the petrol station and transport services offered to the United Nations from 2016 to 2019.

KRA demands were based on a review of the trader’s iTax and statements from his four accounts from the Gulf Bank. KRA said the trader had filed tax returns from his firms in 2015, 2016, and 2017. However, he filed nil returns in 2018 after receiving more than Sh5 million in payments from his businesses. The trader disputed the demands and requested time to provide documents in support of his objection.

KRA rejected Mr. Amin’s request setting the stage for enforcement action that included property seizure and notices to reclaim the money if he failed to honor the taxes.

The tribunal struck out the objection decision dated 30th June 2020 and the KRA was at liberty to undertake any tax audit assessment on the businesses of Mr. Amin.

Also read,

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