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Fraud

KRA to demand Sh150m from controversial mobile clinics supplier

The High Court has given the Kenya Revenue Authority (KRA) a nod to pursue Sh150.9 million in taxes from a controversial company that supplied the government with Sh1 billion portable clinics.

This is after High Court judge David Majanja lifted an order issued by Tax Appeals Tribunal that barred the taxman from demanding the money from Estama Investments Ltd.

Judge Majanja ruled that the tribunal had no jurisdiction to suspend its own proceedings, adding that only the High Court can issue such orders.

“Even if I were wrong on the issue of jurisdiction, the decision reached by the tribunal cannot be supported. It is intolerable that the tribunal would stay its own proceedings for an indeterminate period of time on the basis of a suit whose outcome is unknown,” Majanja said.

The judge also stated that the argument that KRA was not part of the case pending in the anti-corruption was valid.

KRA was seeking Sh322.9 from the company after it conducted tax assessment between 2010 and 2017.

The taxman was pursuing a corporate tax of Sh49.7 million, customs duty of Sh110.4 million and value-added tax of Sh162.6 million.

The parties then sought alternative ways to resolve the matter leading to a deal in March 2019 where Estama Investments agreed to pay Sh150.9 million.

But Ethics and Anti-Corruption Commission (EACC) emerged after the deal was sign to demand Sh400 million from Estama over the supply of the mobile clinics.

EACC also moved to the  High Court where it filed a case demanding the money from the controversial supplier.

The move by the corruption watchdog again saw Estama seeking an injunction from the Tribunal to bar KRA’s demands until the EACC case was concluded.

Estama argued that the cases were similar and the outcome would affect the tax payable.

In March 2020, the tribunal agreed with the firm and stopped the demand until EACC’s recovery case was concluded.

But while appearing before Judge Majanja, KRA argued that tribunal faulted arguing that the deal was binding to all parties involved.


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