KRA Demands Over Ksh. 100m From Rana Auto Selection In Unpaid Taxes 

The Commissioner of Domestic Taxes at Kenya Revenue Authority (KRA) is on the heels of motor vehicle dealer Rana Auto Selection Ltd. over Ksh. 108,213,774 in unpaid taxes. Rana has since lodged an appeal at Milimani Commercial Courts (Commercial and Tax Division) vide an application dated 10/8/2023 seeking a stay of execution of the ruling delivered on 30/6/2023 in favour of KRA pending the determination of an intended appeal.

The KRA, however, opposed the application vide a reply affidavit sworn by Victor Mino on August 24, 2023. Mr. Mino is an employee of the KRA in the Corporate Tax Account Management Division. He averred that the ruling of June 30, 2023, struck out Rana’s appeal in this Court against the Tax Appeal Tribunal’s judgment and that KRA ought to be allowed to enjoy the fruits of its judgment by being allowed the collection of the taxes that have now crystallized for collection.

Mr Riasat Ali Khan (left) is a at director Rana Auto Selection. Photo/Courtesy

 The KRA further argued that if the court followed the orders sought by Rana, there was a likelihood that they would remove the money from its account, thereby making the enforcement of taxes impossible. However, the KRA prayed that if the Court deems it fit to grant the stay orders, it should be on the condition that Rana must deposit 50% of the demanded taxes. Before a ruling on the said application was delivered, the respondent issued agency notices dated 12/9/2023 to the applicant’s bankers for the sum of Ksh.108, 213,774.

 When the parties appeared before the court on September 21, 2023, counsel for Rana proposed that they were willing to put in place a bank guarantee for Ksh. 5,000,000 as security for the taxes, while the KRA advocates prayed for a 50% deposit of the taxes demanded.

 If such a huge amount is paid out of its account, it is likely that the applicant would suffer a substantial loss, the counsel for Rana argued. In a ruling dated October 6, 2023, by Judge E. Mabeya, he ruled, “I find that it would be in the interest of justice for a stay of execution pending appeal to be granted on the condition that a portion of the taxes demanded are paid by the appellant. The appellant proposes a bank guarantee of Ksh. 5,000,000, while the respondent seeks 50% of the taxes demanded, which is half of Ksh. 108,213,774, which translates to Kshs 54,106,887. I think a cash amount of Ksh. 20,000,000 would be sufficient security”.