Westlands-based Jacaranda Hotel has moved to court challenging a tax demand of Sh197 million by the taxman.
The hotel, in an urgent application filed at the Milimani High court yesterday, accuses the tax man of unreasonably demanding the money which was initially Sh50 million and is now in arrears of Sh197million.
The hotelier claims KRA issued a notice of distress through its agents, distraining the hotel’s goods and chattels. They were also served a letter notifying it of auction to recover the money.
The hotel now wants the court to issue orders to quash the notice by KRA dated January 26 that directed it to pay the amount by end of last month.
They claim they made a payment of Sh15 million and proposed to clear the balance in 12 to 18 monthly installments from the monies advanced to it as loan by one of its shareholders.
“Despite the proposal and payment, the respondent without reasons rejected the aforesaid proposal and demanded the hotel to pay Sh50 million before end of January, and clear balance in three equal monthly installments of the same,” the hotel said in court documents.
Jacaranda says that it wants to settle the arrears but due to its current position they can’t raise to amount of money demanded by KRA within the time frame.
They claim in September 2016, the hotel was barred from charging or disposing any of its assets which is still pending before court. In the result they have procured an undertaking from Njenga karume trust fund, a shareholder of jacaranda to loan it funds to settle the monthly installments as per the proposal with KRA.
