Ex­plain Bidco’s tax ar­rears, Om­buds­man writes to KRA

The Com­mis­sion on Ad­min­is­tra­tive Jus­tice says the de­lay in re­cov­er­ing taxes since Septem­ber 2009 has been com­pounded by Bidco’s “abuse of the ju­di­cial process”

The Star (Kenya) - - News Business - OLIVER MATHENGE @Oliv­erMa­thenge

The Om­buds­man is de­mand­ing an­swers from the Kenya Rev­enue Au­thor­ity com­mis­sioner gen­eral John Nji­raini over the al­leged tax eva­sion scan­dal by Bidco Re­finer­ies Ltd.

In a let­ter dated Oc­to­ber 27, Otiende Amollo said the Com­mis­sion on Ad­min­is­tra­tive Jus­tice had re­ceived a com­plaint against KRA, which al­legedly de­layed to col­lect tax ar­rears from Bidco as per an or­der by the High Court in 2012.

The Om­buds­man said the de­lay in re­cov­er­ing the taxes owed, since the ini­tial de­mand in Septem­ber 2009, has been com­pounded by an “abuse of the ju­di­cial process by Bidco”.

“The com­mis­sion has noted that the Au­thor­ity (KRA) has con­doned the abuse of the ju­di­cial process by for­bear­ance, un­fair ac­com­mo­da­tion, pref­er­en­tial treat­ment and/or favouritism, which has mired the pay­ment of over Sh1.3 bil­lion,” the let­ter reads.

The Om­buds­man said the KRA must take im­me­di­ate steps to en­sure any pend­ing chal­lenges to the col­lec­tion of the taxes are de­ter­mined to fi­nal­ity.

“The Au­thor­ity should gen­er­ally de­sist in frus­trat­ing tax col­lec­tion through un­mer­ited con­sents in judi- cial fora,” Amollo said. In a sep­a­rate let­ter, the Om­buds­man has asked the Tax Ap­peals Tri­bunal chair­man Moses Buyuka to ex­plain why the Bidco mat­ter has been pend­ing for four years.

“This let­ter is, there­fore, to re­quest that you ur­gently ad­vise on what pre­cip­i­tated the de­lay, of over four years, of the com­mence­ment and hear­ing of this mat­ter. Kindly ad­vise on the cur­rent po­si­tion of the ap­peal and progress made by the tri­bunal in the hear­ing of the case,” Amollo said in the let­ter dated Oc­to­ber 26.

This comes af­ter MPs, last week, de­manded that Bidco be in­ves­ti­gated for al­legedly not paying Sh1.3 bil­lion in tax.

A pe­ti­tion tabled in the Na­tional As­sem­bly by Ki­ambu MP Jude Njomo lays bare in­stances where Bidco has failed to pay taxes.

On April 19, 2012, the KRA had de­manded Sh1.37 bil­lion from Bidco, which in­cluded taxes owed amount­ing to Sh780 mil­lion in penal­ties and in­ter­est ac­crued since 2009. Bidco filed a case in court chal­leng­ing the KRA’s en­force­ment of the de­mand, and ob­tained con­ser­va­tory or­ders stop­ping the en­force­ment ac­tion.

Bidco’s pe­ti­tion was dis­missed on Au­gust 6, 2013, and it sought tem­po­rary stay or­ders pend­ing an ap­peal, which was granted. The is­sue is now pend­ing be­fore the Tax Ap­peals Tri­bunal fol­low­ing the ap­peal.


Chair­per­son of Com­mis­sion on Ad­min­is­tra­tive Jus­tice Otiende Amollo in his of­fice of the Om­buds­man in Nairobi on July 13

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