The Court of Appeal on 24th April 2020 ruled in favour of Kenya Revenue Authority(KRA) in an appeal filed against the decision of the High court in a Judicial Review Case Miscellaneous Civil Application No. 610 of 2008; Republic versus Kenya Revenue Authority and Commissioner Domestic taxes: Ex-parte Kenya Nut Limited.
The dispute in the matter was whether Kenya Nut Limited should pay withholding tax on commissions paid to its overseas agents amounting to Kshs. 33,534,855.00.
The High Court had quashed the assessment Notice of 19th August 2008 demanding Kshs. 33,534,855.00 Withholding tax and stopped the enforcement of the said demand.
KRA being aggrieved by this decision filed an appeal in the Court of Appeal Challenging the same.
The Court of Appeal Judges William Ouko, Daniel Musinga and Sankale ole Kantai in allowing the appeal found that given that the Company’s exposure and involvement in international trade, it had the capacity to device practical technique, methods and systems that would ensure collection and remission of the Withholding tax from source.
The Learned Judges stated that it ought to have made provision in the contract between them and the agents to ensure that at the point the commission was paid, withholding tax should have been factored in and thereafter remitted the same to KRA.
