Tax tribunal backs KRA in Sh74 million tax dispute against hotelier

Kenya Revenue Authority (KRA) head offices

The Tax Appeals Tribunal has ruled in favour of the Kenya Revenue Authority (KRA) in a case filed by hospitality firm  Kisii Safari Inns Ltd Kaskazi Beach Hotel challenging the collection of taxes amounting to Kshs. 74 million.

The Tribunal dismissed the hospitality firm’s application for extension of time to file an appeal out of time. The firm had failed to file an appeal within the legal timelines and sought to have time extended in order to challenge the enforcement measures KRA initiated to collect the outstanding revenue.

KRA opposed the application on the ground that the taxes it sought to collect were based on the firm’s self-assessments. KRA further argued that the hospitality firm had admitted owing the taxes demanded but had failed to make payments or present an agreeable payment plan as provided for under section 52 (2) of the Tax Procedures Act 2015.

While backing KRA’s argument, the tribunal held that it was unable to extend time for the taxpayer to file an appeal unless and until the taxpayer pays the undisputed taxes. This means that KRA shall not allow taxpayers to file appeals on matters with admitted tax liabilities.