Relief for businesses across the country as tax due date is nullified by the Court

By Winfridah Muthee

The High Court on Monday, 19th April 2021, granted an injunction against the implementation of the Minimum Tax.

Justice George Odunga sitting in Machakos stated that, “ I grant conservatory orders restraining the 2nd Respondent Kenya Revenue Authority (KRA) whether acting jointly or severally by itself, its servants, agents, representatives or howsoever otherwise from the implementation, further implementation, administration, application and/or enforcement of Section 12D of the Income Tax Act, Chapter 470 of the Laws of Kenya as amended by the Tax Laws (Amendment) (No.2) Act, 2020 by collecting and/or demanding payment of the Minimum Tax pending the hearing and determination of this Petition.”

The case, filed in Machakos by Kitengela Bar Owners Association through their lawyers Okwach & Company Advocates, raised similar issues to the suit that had been filed last month by Kenya Association of Manufacturers, Retailers Association of Kenya and Kenya Flower Council in Nairobi.

The orders granted in Machakos are applicable to the Petition filed in Nairobi and can be relied on by all Kenyans.

This was confirmed and admitted by KRA yesterday afternoon in court before Justice Mrima in the Nairobi Petition. By virtue of the Conservatory Orders having been granted, the Minimum Tax payments that were due today Tuesday 20^th April will wait until the matter is heard and determined in full.

This order fully aligns with the petitions submitted to the courts by the above-mentioned Associations on the increased cost burden to businesses across the country. It also captures the mood and the spirit of the country as we grapple with the difficulties presented with navigating the COVID-19 pandemic.

Additionally, the High Court sitting in Nairobi has now transferred the Nairobi Petition to Machakos to have the two Petitions consolidated and heard together. The Conservatory Orders issued are an interim measure and the matter will be fully heard in the coming days.