Total in court to block Sh329m KRA tax claim

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Total in court to block Sh329m KRA tax claim


Oil distributor TotalEnergies rushed to court to prevent KRA from seizing its accounts over tax arrears amounting to 329.5 million shillings. FILE PHOTO | NMG

Oil distributor TotalEnergies has rushed to court to prevent the Kenya Revenue Authority (KRA) from seizing its accounts over tax arrears amounting to 329.5 million shillings.

The multinational claims in a complaint to the High Court that the tax authorities will seize its accounts at KCB and Stanbic – crippling its operations – unless it is arrested by the court.

The company says the KRA wrote to its bankers on May 31 demanding payment of the amount, but the oil company says the move is deliberate and aimed at sabotaging its operations because its waiver request, made more than five years ago years, has never been addressed.

“Unless this Honorable Court urgently reviews and intervenes in the circumstances, the Applicant’s operations will be anchored as funds held with his bankers will be frozen following the Respondent’s decision and notices of agency issued in excess and abuse of their administrative powers,” his lawyer Waweru Gatonye said in the petition.

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Court documents show that the KRA and the oil company entered into an alternative dispute resolution mechanism in 2016 following a tax dispute.

The company claims that the parties agreed that TotalEnergies would pay the principal amount of 405.9 million shillings in a single payment.

TotalEnergies was also free to request a waiver on penalties and interest, which it did by requesting a 100% waiver.

The company says the waiver request was never processed and all was well until May this year when the tax authorities demanded payment and issued notices to the company’s bankers.

When the company requested answers to its waiver request, the KRA referred the company to the Cabinet Secretary to the Treasury for review.

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Mr. Gatonye asserts that the notices were issued without communication to TotalEnergies or notification to the company.

“In light of Section 51(11) of the TPA, it is clear that efficiency in rendering decisions on tax objections and applications is essential under the law and having not rendered a decision on the waiver requested within 60 days, the petitioner’s request for exemption can only be considered accepted”, Boniface Abala, Legal Manager.

Mr. Alaba claims that failure to notify the company in writing of the objections is a violation of the law.

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