The High Court has stopped the Kenyan taxman from demanding payment of the minimum tax introduced by the government last year.
Justice George Vincent Odunga of the Machakos High court issued conservatory orders on Monday restraining the Kenya Revenue Authority (KRA) from further implementing the one percent minimum tax.
“I find that this is an appropriate case for KRA to “hold its horses” for the time being as this Court navigates through the labyrinth of the respective contentions made by the parties herein,” Justice Odunga ruled.
The Judge noted that the implementation of the legislation stands to kill businesses and the livelihood of millions of Kenyans operating small to medium enterprises.
“The death of a business is certainly not a damage that can be remedied by way of damages. That is why it’s in the interest of Justice that this court intervene to preserve the business and livelihoods of the petitioners(Kitengela bar owners) and millions of SMEs pending the hearing and determination of this Application and Petition,” he said.
The Minimum tax came into effect on January 1, 2021 under the Finance Act 2020.
Tha tax is a base income tax payable by all persons regardless of whether or not they make a profit.
KRA said the tax seeks to bring more enterprises into the tax bracket, allowing it to collect more revenue in order to achieve the Sh1.57 trillion target for the financial year 2020/21.