KRA files Application to been joined in NCBA Group Tax Exemption Case.

Kenya Revenue Authority (KRA) has filed an application to been joined in a tax dispute between NCBA Group and the Cabinet Secretary National Treasury and Economic Planning. The Case, which is before the High Court regard exemption granted to NCBA from paying Capital Gains Tax (CGT) amounting to Ksh.1.35Billion.

Following the merger of NIC Group PLC and Commercial Bank of Africa, NCBA was granted Capital Gains Tax exemption in June 2019.Upon review of the exemption, the Cabinet Secretary National Treasury and Economic Planning in March, 2023, determined that there was no demonstrable public interest in the transaction to warrant exercise of discretion to exempt the payment of CGT in favour of NCBA .The Cabinet Secretary consequently revoked the exemption, and KRA demanded payment of the taxes from NCBA.

On 27th April 2023, the High Court issued expert conservatory orders halting KRA from demanding and collecting the taxes. This is despite KRA not being part of the proceedings. KRA is now seeking to participate in the proceedings to challenge the conservatory orders and highlight important tax provisions that will assist the court in delivering justice effectively.

The Authority contends that the continued adjudication of the dispute without its involvement will negatively impact its mandate of revenue mobilization including assessing, collecting, and accounting for all tax revenues mentioned in the dispute. The effects will injure the public interest and public trust bestowed upon the Authority. KRA believes that it is imperative that it be included in the dispute to ensure effective justice delivery. The court has certified KRA’s application as urgent and has set 11thMay 2023 as the day it will issue direction.

Ag. Commissioner- Legal Services & Board Coordination

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KRA files Application to been joined in NCBA Group Tax Exemption Case.