Times Tower in Nairobi, the headquarters of Kenya Revenue Authority (KRA). Picture taken on Thursday, October 15, 2020. PHOTO | DENNIS ONSONGO | NMG
A State water agency has sued the Kenya Revenue Authority (KRA), challenging the taxman’s withdrawal of Sh14.5 million from its equalisation fund account to settle tax liabilities.
In its petition at the High Court, Coast Water Works Development Agency (CWWDA) wants an order issued compelling the taxman to credit into its account the money which was withdrawn.
The agency says it was served with notices demanding it to pay commissioner for investigations and enforcement at KRA money its holds or owed to Robertson Otwane, trading as Tersa Trading Enterprises.
The water agency says that it communicated with the taxman and explained its inability to honour the agency notices but there was no response.
It argues that upon conducting an internal review and audit of its contracts, it was discovered that there was confusion on citation of the correct taxpayer between Mr Otwane and Tersa Trading Enterprises which was communicated to KRA.
CWWDA also argues the action by KRA is unconstitutional, illegal and without due regard to procedural proprietary.
“The targeted account is designated for purposes of handling all funds from the equalization fund from the National Government, any transactions on the account has to have express provisions regarding approvals and withdrawals,” argues CWWDA.
It further notes that for KRA to have targeted the account, it amounted to an illegal and wrongful exercise of discretionary powers granted to it under Section 42 of the Tax Procedure Act.
CWWDA says that the act of making withdrawals to settle tax collections targets against funds held by a public entity without following procedure and for the sake using the funds for any other purposes other than that stipulated in the constitution goes against the principles of national governance.
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