Tax Appeals Tribunal Dismisses Subru Motors Suit Seeking to Stay The Collection Of Kshs.181 Million Tax

The Tax Appeals Tribunal has dismissed an application filed by Subru Motors Limited seeking a stay of collection of taxes amounting to Kshs. 181.4.

The firm had sought the intervention of the Tribunal to order for stay of execution of its judgment delivered on 10th July 2020, which was in favor of KRA.

The Taxpayer had argued that the Tribunal has jurisdiction to order for stay of its judgment and relied on the principle of equity as well as Section 18 of the Tax Appeals Tribunal Act, 2013.

KRA opposed the application and argued that the Tribunal was rendered functus officio upon delivery of the judgment.

The taxman further argued that there is no specific provision under the Tax Appeals Tribunal Act, 2013 or rules made thereunder conferring jurisdiction to the Tribunal to order for stay of execution.

In a ruling, the Tribunal agreed with KRA and affirmed that it is rendered functus officio upon delivery of its judgment.

The Tribunal also affirmed that there is no specific provision of law permitting it to stay its orders.

Meanwhile, the High Court has allowed KRA to collect Ksh. 41 Million tax from M/S Madison Insurance Company Limited (the Insurer).

The Insurer will have to pay the tax together with interest and penalties.

The Court sitting in Nairobi dismissed with costs, the Insurer’s Appeal against the Tax Appeals Tribunal’s Judgment dated 26th May 2017.

The Insurer then filed an Appeal at the Tax Appeals Tribunal which was dismissed and taxman’s assessment upheld on grounds that the Madison Insurance was not entitled to offset the life insurance business tax losses incurred before 1st January 2009 in its taxable income for the year 2009.

Madison was aggrieved and moved to High Court for Orders among others, that it was entitled to offset the accumulated life insurance business tax losses as at the end of the year 2008 in its taxable year of income for the year 2009.

KRA’s position was that the law could not be applied retrospectively and that only losses obtained from 1st January 2009 onwards could be offset but not those before. The High Court reaffirmed KRA’s position and upheld the Judgment by the Tax Appeal Tribunal as having been sound and correctly based on the law and facts of the case.