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Lewis Njoka @LewisNjoka

Tax Appeals Tribunal has dismissed an application to reinstate a tax appeal withdrawn earlier by Muhugu Ltd paving way for the taxman to collect taxes amounting to Sh60 million from the taxpayer.

The tribunal ruled that once withdrawn, an application cannot be reinstated. “KRA saw the taxpayer’s application for reinstatement of the appeal as done in bad faith and solely because of its quest for taxes that are otherwise due.

Following the Ruling the caveat will remain in force until such time the tax is paid,” said KRA in a statement.

Muhugu Ltd had filed a tax appeal against KRA in 2014 but withdrew it in 2016. 

KRA then issued agency notices to Muhugu’s banker, Kenya Commercial Bank, in March 2016 seeking to recover taxes owed totalling Sh59,640,304.

Withdrawn earlier

This prompted the taxpayer to make an application seeking to reinstate the appeal withdrawn earlier. 

However, the Tribunal, relying on precedents from courts, held that the appeal could not be reinstated as the withdrawal was complete and effective. 

By the time the application for reinstatement was made, KRA, had already placed a caveat restriction over the property of  Muhugu Ltd restricting the transfer of the property.

KRA is under pressure to collect additional revenue to help the government fulfil its obligations.