The Federation of Kenya Employers (FKE) has reached out to the Kenya Revenue Authority (KRA) for clarification regarding the tax implications following the Court of Appeal’s decision to declare the Finance Act 2023 unconstitutional.
On July 31, 2024, a three-judge bench of the Court of Appeal ruled that the Finance Act was unconstitutional, effective prospectively from the date of the judgment.
Employers uncertainty
This ruling has left many employers and taxpayers in Kenya uncertain about their tax obligations.
In an open letter addressed to KRA, the FKE expressed concerns that members and taxpayers are unable to remit taxes in compliance with the recent judgement.
The federation noted that the KRA has yet to configure its systems to align with the court’s decision, causing confusion among taxpayers.
The FKE’s letter emphasizes the urgent need for KRA to provide clear guidance on how employers and taxpayers should proceed with tax payments in light of the ruling.
“Reference is made to the above matter where the Court of Appeal delivered its judgment on the 31st of July 2024 declaring the Finance Act 2023 unconstitutional prospectively from the date of the judgment,” FKE stated in the letter.
“The Federation of Kenya Employers (FKE) regrets that our members and indeed all taxpayers in Kenya are unable to remit taxes in accordance with the Judgment for reasons that the Kenya Revenue Authority (KRA) has not yet configured its systems to comply with the court of appeal Judgment,” the letter explained.
Deadline
The federation pointed out that, August 9, 2024, marks the final day for the remittance of July 2024 taxes, and without immediate clarification, its members risk facing penalties for non-compliance.
The FKE has called for a prompt response from KRA to ensure that taxpayers can meet their obligations without facing unnecessary penalties or legal complications.
“The purpose of this open letter is to 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.
“We also note that today the 9th of August 2024 is the last day for remittance of July 2024 taxes and our members may face penalties if KRA does not immediately address this concern,” FKE concluded.
