SUBRU MOTORS LTD TO PAY 181M IN TAXES
By Donald Kogai
The Tax Appeals Tribunal dismissed an
application filed by Subru Motors Limited
seeking stay of collection of taxes amounting
to Kshs. 181,406,247 found due by the Tribunal.
Subru Motors Limited had sought intervention
of the Tribunal to order for stay of execution of
its judgement delivered on 10th July 2020,
which was in favour of KRA. The Taxpayer had
argued that the Tribunal has jurisdiction to
order for stay of its own judgement and relied
on principle of equity as well as Section 18 of
the Tax Appeals Tribunal Act, 2013.
KRA opposed the application and argued that
the Tribunal was rendered functus officio upon
delivery of the judgement. The Authority further
argued that there is no specific provision under
the Tax Appeals Tribunal Act, 2013 or rules
made thereunder conferring jurisdiction to the
Tribunal to order for stay of execution.
In a ruling, the Tribunal agreed with KRA and
affirmed that it is rendered functus officio upon
delivery of its judgement. The Tribunal also
affirmed that there is no specific provision of
law permitting it to stay its own orders.
Meanwhile, the High Court has allowed KRA to
collect Kshs. 41 Million tax from M/S Madison
Insurance Company Limited (the Insurer). The
Insurer will have to pay the tax together with
interest and penalties.
The Court sitting in Nairobi dismissed with
costs, the Insurer’s Appeal against the Tax
Appeals Tribunal’s Judgement dated 26th May
2017.
The dispute emanated from the repeal of
Section 19(9) and the amendment of Section
19(5) of the Income Tax Act by the Finance Act
2008, which took effect on 1st January 2009.
The Insurer in its claim purported to offset its
losses for year 2008 in the year 2009. KRA
disallowed the same and raised additional
assessments for two years.
The Insurer then filed an Appeal at the Tax
Appeals Tribunal. The Appeal was dismissed
and KRA’s assessment upheld on grounds that
the Madison Insurance, was not entitled to
offset the life insurance business tax losses
incurred prior to 1st January 2009 in its taxable
income for the year 2009.
Madison was aggrieved and moved to High
Court for Orders among others, that it was
entitled to offset the accumulated life insurance
business tax losses as at the end of the year
2008 in its taxable year of income for the year
2009.
KRA’s position was that the law could not be
applied retrospectively and that only losses
obtained from 1st January 2009 onwards could
be offset but not those before.
The High Court reaffirmed KRA’s position and
upheld the Judgement by the Tax Appeal
Tribunal as having been sound and correctly
based on the law and facts of the case.
SUBRU MOTORS LTD TO PAY 181M IN TAXES
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SUBRU MOTORS LTD TO PAY 181M IN TAXES
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