KPA wins first phase of Sh1.9 billion dispute with KRA

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The High Court has temporarily set aside an order stopping the Kenya Ports Authority (KPA) from accessing its seven bank accounts over an Sh1.9 billion tax dispute with the Kenya Revenue Authority.

Justice John Mativo issued the directive after KPA, through Lawyer Cecil Miller, told the court that their operations are on the brink of closing down.

“If the court does not intervene as a matter of urgency, then the Agency notices by KRA (to the banks) also have extremely dire consequences as to the KPA’s operations. The Agency notices will lead to ultimate shut down of the KPA’s business both locally and regionally and paralyzing business globally,” he said.

The agency notices are dated May 6and May 16, 2022. They were issued by KRA to the KPA’s banks. The named banks are Standard Chartered Bank, Citi Bank, Co-operative Bank of Kenya, Kenya Commercial Bank, NCBA, Equity Bank and Diamond Trust Bank

KPA argued that the notices will completely paralyze their operations, a disadvantage to the country and the region.

The order freezing KPA’s accounts at the said banks was issued on May 17 this year.

KRA had also issued the banks with Agency notices in respect of funds held in the accounts to allow it to collect the alleged defaulted taxes amounting to Sh1,993,582,700.

But KPA says the demanded figure by KRA in the notices has been ‘computed in a very unclear way’ and that the demands were based on a misinterpretation of the law.

The dispute relates to the payment of Sh1.9 billion made to Toyota Tsusho Corporation and Med Marine Kilavuzkul for procurement of a project described as ‘associated infrastructure expansion programs’ to improve operations at the port of Mombasa.

The money was also for the supply of port equipment sourced outside the country. 

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