Court overturns new income tax introduced by Uhuru's gov't in January

April 19, 2021 3:33 PM

New court ruling on minimum tax

High Court Judge George Odunga

The High Court of Kenya has overturned the 1 per cent minimum tax introduced by the President Uhuru Kenyatta regime starting January 1, 2021.

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In a ruling delivered by Justice George Odunga, the Kenya Revenue Authority (KRA) was barred from demanding the payment.

"I grant conservatory orders restraining the 2nd respondent whether acting jointly or severally by itself, its servants, agents, representatives or howsoever otherwise from implementing, further implementation, administration, application and/or enforcement of Section 12D of the Income Tax Act, Chapter 470 of the laws of Kenya as amended by the Tax Laws (Amendment) (No.2) Act, 2020 by collecting and/or demanding payment of the Minimum Tax pending the hearing and determination of this petition," the ruling read in part.

According to KRA, the Minimum Tax is a base income tax, payable by all persons regardless of whether or not they make a profit.

The KRA guidelines require the minimum tax declaration by the 20th day of the month following the end of the accounting period - that is - the 4th, 6th, 9th and 12th month of the year of income.