Cash hungry Kenya now wants contested tax bills paid before courts rule on them as its coffers run dry

Kenya Revenue Authority (KRA) offices at Times Tower
  • The government is drafting a bill to empower the Kenya Revenue Authority to enforce mandatory payment of tax even when it’s being contested in the courts.
  • Over 300 billion shillings ($2.9 billion) is held up in about 1,000 legal disputes before a tax-appeals tribunal and courts, according to President Uhuru Kenyatta.
  • President Kenyatta has also assured investors that the government is serious in its fight against graft.

Investors locked in contested tax bills with the Kenyan government will soon be forced to pay pronto even if the courts is yet to rule on the matter.

Kenya is planning to formulate a legislation to compel the payment of contested tax bills before courts rule on them, even as it assures investors that the government is serious in its fight against graft and that the war against corruption will continue so as to make the country’s business environment better.

Kenya’s move to compel the payment of contested tax bills is in a bid to boost government revenue and help plug a widening budget deficit.

Over 300 billion shillings ($2.9 billion) is held up in about 1,000 legal disputes before a tax-appeals tribunal and courts, President Uhuru Kenyatta said Tuesday at a meeting in the Kenyan capital, Nairobi. 

“Most of these cases have stayed for more than two years,” he said, Bloomberg reported.

As a result, the government is drafting a bill seeking to empower the Kenya Revenue Authority to enforce mandatory payment of tax even when it’s being contested in the courts. The bill will be presented in four months, Kenyatta said.

Kenyatta’s comments come after the National Treasury increased its 2019-20 budget-deficit forecast to 6.2% of gross domestic product from 5.9% earlier following revenue shortfalls. The government also plans to increase its debt-ceiling to be able to borrow more to fund planned infrastructure expansion.

Meanwhile, while opening the 2nd American Chamber of Commerce US-East Africa Trade and Investment Forum at the UN Complex in Gigiri, Nairobi, President Kenyatta challenged the private sector to play its role in the fight against corruption by fully implementing its anti-graft code of conduct.

“We will strive to uphold good business practices and keep the business environment transparent and fair and ensure that all businesses in Kenya have a level playing field, regardless of whether they are local or international companies,” he said.

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