On Monday, September 20, 2021, Kenyan High Court declared Minimum Tax unconstitutional and null and void.
Minimum Tax is a base income tax, payable by all persons regardless of whether or not they make a profit.
The Finance Act of 2020 and the Tax Laws Amendment (No.2) Act of 2020 were used to pass the plan.
The Act allows the Kenya Revenue Authority (KRA) to collect minimum Tax at one percent of the gross turnover rate, beginning January 2021.
In his ruling, Judge George Odunga described the mentioned law as unfair since it put the loss-making companies in the same category as those known for tax evasion.
He also stated that the law also subjects people to double taxation.
“Minimum tax provisions are unconstitutional and the guidelines should be considered void. I, therefore, issue an order restraining KRA from implementing, further implementing or enforcing the provisions of Section 12D of the Income Tax Act,” said Judge Odunga.
A section of businesspeople had gone to court seeking an order to prevent KRA from introducing an additional tax.©Standard Gazette, 2021. Unauthorized use and/or duplication of this material without express and written permission from this site’s publisher is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Standard Gazette with appropriate and specific direction to the original content.