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| Federation of Kenya Employers (FKE) CEO Jacqueline Mugo (l) speaking at a past meeting. KRA Commissioner General Humphrey Wattanga (r) at a past event |
Kenyan employers now want the Kenya Revenue Authority (KRA) to clear the clouds on tax payments after the Court of Appeal declared the Finance Act 2023 unconstitutional. . The Federation of Kenya Employers (FKE) sought urgent clarification from KRA after the taxman went mute on the status of the July 2024 tax payments, which fell due on August 9, 2024. Employers want KRA to adhere to court ruling In an open letter to KRA Commissioner General Humphrey Wattanga dated August 9, 2024, FKE quoted the appeal case No. E003 of 2023, filed by Busia Senator Okiya Omtata and others. FKE chief executive officer Jacqueline Mugo raised concerns that its members and other taxpayers are unable to remit taxes as required because KRA failed to align its systems with the court’s judgment. “FKE regrets that our members and indeed all taxpayers in Kenya are unable to remit taxes under the judgment because KRA has not yet configured its systems to comply with the Court of Appeal’s decision. “We ask KRA to urgently clarify to employers and all taxpayers in Kenya on how they should pay their taxes in view of the Court of Appeal judgment.,” said Mugo. Mugo further noted that FKE members risk penalties if the taxman does not immediately address the concern. The three-judge bench found that the legislative process leading to the Finance Act 2023 failed to provide sufficient opportunities for public input, violating constitutional mandates. List of Finance Act 2023 taxes employers want KRA to clarify The ruling meant that tax measures introduced and implemented under the act were unconstitutional. Tax laws introduced through the Finance Act 2023 include increases in PAYE taxes, annual advance tax rates for vehicles, and the Housing Levy. The Act also introduced the requirement for electronic tax invoicing management (eTIMS) for companies and businesses. Kenyan lawyer calls for withdrawal of fuel VAT Another controversial tax is the additional 8% VAT on petroleum products, which significantly increased fuel prices. Lawyer Willis Otieno called on the Energy and Petroleum Regulatory Authority (EPRA) to withdraw the 8% VAT on fuel and review pump prices following the court ruling. The vocal lawyer noted that the conversation should focus on how the Kenyan government would refund over KSh 300 billion collected under the Act.
by Wycliffe Musalia