The Kenya Revenue Authority (KRA) is mulling taking controversial Kenyan economist Dr David Ndii to court over Ksh2.8 million unpaid taxes.
KRA and Dr Ndii have been embroiled in a tax dispute that saw a case lodged with the tax tribunal, local daily reports.
KRA in a notice in December 2017 asked for Ksh11,395,591 from Ndii from income tax of around Ksh8.4 million and a further Ksh2.9 million from Value Added Tax (VAT). This is what led to a showdown between Ndii and the taxman.
KRA has now issued a notice to the High Court making known its move to appeal a decision by the Tax Appeal Tribunal chaired by Josephine Maangi where the income tax issue was settled out of court and VAT claim reduced to Ksh2.8 million.
In its decision, the tribunal cited that KRA’s procedure in notifying Dr Ndii of his unpaid taxes was wrong which invalidates the whole claim.
The tribunal said KRA should have formally written to Dr Ndii informing him of his unpaid dues in the tax assessment carried out in 2015.
Maangi noted that KRA enlisted claimed that DR Ndii’s business had a gross earning of Ksh5 million which means he is eligible to pay VAT which prompted the KSh2.8 million demand and went ahead to list him under the VAT category.
“The tribunal notes that there is no documentary evidence to show that the respondent (KRA) wrote to notify the appellant about the registration and cannot therefore retroactively demand for tax for the period under review,” it ruled.
KRA is now appealing this decision by the tribunal.