KRA bid to block Sh4.5bn allocated to Nairobi County quashed

A Nairobi court has stopped Kenya Revenue Authority (KRA) from blocking Sh4.5 billion allocated to Nairobi County in Tax Evasion row.

This is after lawyer Cecil Miller filed an application at the High Court on behalf of the county seeking to quash the order that barred the release of funds.

Miller had told the court that KRA enforced the illegal notices dated September 10, 2019 by recovering Sh2 billion, the county’s Revenue Fund Account without its knowledge and consent leaving it with no funds to pay its employees’ salaries and run other county responsibilities.

The county through Miller told Judge Pauline Nyamweya that KRA has written to seven banks seeking to enforce agency money over alleged tax due.

The county maintains that if the orders are not granted, KRA is likely to continue enforcing the illegal and irregular notices denying it funds required to carry out its mandate to the residents of Nairobi City County and even pay it huge work force.

The county also want a settlement of a tax dispute dated September 19, 2019, which was purportedly entered into between some its officials and KRA declared unlawful.

National Bank of Kenya, Barclays Bank of Kenya Limited, Kenya Commercial Bank, Commercial Bank of Kenya Limited, Equity Bank of Kenya Limited, Co-operative Bank of Kenya Limited, Standard Chartered Bank and Central Bank of Kenya were listed as interested parties.

Nairobi County wanted to quash the decision of the KRA to issue the Agency Notices dated April 12, 2019, September 10, 2019 and October 23, 2019 to the Banks with respect to funds held by the banks belonging to the county.

“It was unreasonable for KRA to unilaterally recover Sh2 billion from the County’s revenue fund in recovery of tax due to it without its knowledge, approval and consent,” said Miller.

Miller had told the court that it was also unreasonable for KRA to recover that taxes due to it from the County being aware that the court had on February 27, 2019 barred it from issuing any further Agency Notices and directed it to recover the tax due to the county using other means.

The lawyer had also told the court that it was unreasonable for KRA to purport to unilaterally recover cash from the County Revenue Fund and County Exchequer Account without the approval of the Controller of Budget.

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