[ad_1]
Taxpayers are left confused on how to pay their taxes after the Court of Appeal ruled that the Finance Bill 2023 is unconstitutional.
Earlier, the Supreme Court rejected a plea by the National Finance Ministry for a moratorium order, which would have allowed the government to continue collecting taxes even though The case was heard and decided In the Supreme Court.
This means the Kenya Revenue Authority (KRA) may not be able to collect taxes introduced by the 2023 Finance Bill, including a higher withholding tax (Paye) for high-income earners, a 16% value-added tax (VAT) on petroleum products, which was previously 8%, and an affordable housing levy.
The Federation of Kenya Employers (FKE) on Friday noted that despite the court’s judgment, the Kenya Revenue Authority has yet to adjust its tax systems to reflect the Court of Appeal’s ruling and the Supreme Court’s refusal to issue a stay order.“The Federation of Kenya Employers regrets that our members and indeed all taxpayers in Kenya are unable to pay their taxes as per the judgment because the Kenya Revenue Authority has not configured its systems to comply with the Court of Appeal’s judgment,” FKE executive director Jacqueline Mugo said in a letter to the Commissioner of Kenya Revenue Authority.
“The purpose of this open letter is to ask KRA to urgently Clarify with employer and how all taxpayers in Kenya are expected to pay their taxes in light of the Court of Appeal’s decision. We also note that today, August 9, 2024 is the deadline for payment of July 2024 taxes and our members may face penalties if KRA does not resolve this issue immediately.”
While the Kenya Revenue Authority may not be able to collect higher taxes introduced by the Finance Bill 2023 following the Court of Appeal ruling, Kenyans may also suffer as it also rolls back some measures that reduced taxes on some goods.
The bill will restore zero VAT on cooking gas (previously 8%). It will also reduce the excise tax on telephone and internet data services, as well as remittance services provided by banks, money transfer agencies and other financial service providers from 20% to 15%.
At the sentencingThe Court of Appeal noted that taxpayers will not be able to claim a refund of taxes paid in the first year of the implementation of the Finance Act 2023. This is based on the presumption of constitutionality of statutes, which means that unless a court decision declares a statute unconstitutional, it will be deemed constitutional.
The same could be said for other benefits Kenyans are enjoying as a result of the Act, such as the tax amnesty, which waives penalties and interest until December 31, 2022, as long as taxpayers provide a payment plan for their unpaid taxes.
“We also believe that the immunity enjoyed will not be reclaimed based on the presumption of constitutionality,” analysts at Bowmans Kenya said.
[ad_2]
Source link
