Kenya Revenue Authority (KRA) has been collecting taxes from January without a legal basis to do so. This came about as a result of former finance minister Uhuru Kenyatta withdrawing the Finance Bill from the house. KRA has been collecting taxes on the back of  the Provisional Collection of Taxes and Duties Act that allowed it to enforce the new measures till December 31 last year, a date after which it would be ''illegal'' for KRA to collect tax.

John Njiraini, the Commissioner-General at the KRA, said there is no legal provision for refund of consumer taxes and that even if such a law was enacted it would be practically impossible to implement. He said that although the law only allowed KRA to enforce new tax measures contained in 2011 June Budget for the first six months of the financial year, the unprecedented failure by MPs to pass the Finance Bill had left him with no option but to maintain the status quo as he awaits Parliament’s approval.

The law allows the Finance minister to collect the taxes for six months. At the expiry of the six months, the Treasury is expected to have pushed the Finance Bill through Parliament or seek MPs’ authority to extend the period. Parliament and the executive have been on a stand off over the Finance Bill since December last year.

The “illegal taxation” measures have mostly affected beer and cigarette consumers who have dutifully paid the new excise tax rates since January.

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Courtesy: Business Daily