Dutch flower company loses Sh1.3 billion tax case against KRA: The Standard

Business
The company opposed the assessment but the case was thrown out because the firm was found not to have exhausted all dispute resolution channels

The Kenya Revenue Authority can proceed to collect Sh1.3 billion in taxes from a foreign flower company following a court decision last week. In a ruling delivered online, High Court judge Momanyi Bwonwong’a dismissed a judicial review application filed by the company, Van Den Berg Limited, in April 2016 seeking to quash a tax assessment by the Commissioner of Domestic Taxes. The company opposed the assessment but the case was thrown out because the firm was found not to have exhausted all dispute resolution channels as provided under tax law. “The company had not exhausted the dispute resolution mechanism provided under Section 12 of the Tax Appeal Tribunal Act,” said Justice Bwonwong’a.

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“A party may only be excused from complying with the provisions of the said section if it demonstrates that the Tax Appeal Tribunal was ineffective or that there were exceptional or unusual circumstances in its application to warrant the filing of the judicial review application.” The taxman had put Van Den Berg on notice and sought to assess its taxes from the 2008 to 2013. The audit revealed that the company owed Sh1.3 billion in corporation tax, withholding income tax, value-added tax, Pay as You Earn and Kenya Bureau of Standards Levy for six years. Van Den Berg however pleaded that KRA be prohibited from demanding the amount because the calculation in the assessment was marred by irregularities.