[Kenya] Revenue Authority barred from Sh234 Equity Bank tax demand

In Nairobi, The Court of Appeal has temporarily barred the Kenya Revenue Authority (KRA) from demanding Sh234 million PAYE from Equity Bank, The Standard reports.

The KRA is pursuing Equity over tax accrued from share buyouts by its employees.

Justices Fatuma Sichale, Jamilla Mohammed and Mbogholi Msagha granted the bank a reprieve after finding that it might suffer irreparable losses if it pays the revenue authority before the conclusion of the case.

The KRA had previously served the bank with a demand notice after the latter lost its case before the commercial court in Nairobi.

“It is indeed not in dispute that the respondent has already issued a demand and threatened to commence enforcement measures against the applicant. No doubt, the amount involved is colossal,” a statement from the court said.

Equity Bank reportedly promised to provide a guarantee of the entire amount in the event the appeal fails.

“If the respondent is allowed to proceed with enforcement of the same, it is likely that the applicant will suffer unbearable hardship that may have the effect of stifling and crippling its operations,” the judges’ ruling said.

Initially, the KRA demanded Sh1.7 billion from Equity but the lender objected. 

During the course of the case, Equity’s legal manager Lydiah Ndirangu described how the revenue authority demanded the amount on September 19, 2017.

The amount included PAYE assessment for the year 2016 and tax on shares in an employee share ownership plan.

Source: The Standard

(Quotes via original reporting)

In Nairobi, The Court of Appeal has temporarily barred the Kenya Revenue Authority (KRA) from demanding Sh234 million PAYE from Equity Bank, The Standard reports.

The KRA is pursuing Equity over tax accrued from share buyouts by its employees.

Justices Fatuma Sichale, Jamilla Mohammed and Mbogholi Msagha granted the bank a reprieve after finding that it might suffer irreparable losses if it pays the revenue authority before the conclusion of the case.

The KRA had previously served the bank with a demand notice after the latter lost its case before the commercial court in Nairobi.

“It is indeed not in dispute that the respondent has already issued a demand and threatened to commence enforcement measures against the applicant. No doubt, the amount involved is colossal,” a statement from the court said.

Equity Bank reportedly promised to provide a guarantee of the entire amount in the event the appeal fails.

“If the respondent is allowed to proceed with enforcement of the same, it is likely that the applicant will suffer unbearable hardship that may have the effect of stifling and crippling its operations,” the judges’ ruling said.

Initially, the KRA demanded Sh1.7 billion from Equity but the lender objected. 

During the course of the case, Equity’s legal manager Lydiah Ndirangu described how the revenue authority demanded the amount on September 19, 2017.

The amount included PAYE assessment for the year 2016 and tax on shares in an employee share ownership plan.

Source: The Standard

(Quotes via original reporting)