David Luketelo Sifuma VS KRA

#DavidLuketeloSifumaVSKRA

David Sifuma was hired on casual basis by Whitespace Technologies Limited. He joined the company in the 2016 as a Supervisor.

The company would pay casuals through David’s bank account since a majority did not have bank accounts. This continued until March 2017, when the company decided to pay his salary through his bank account after deducting PAYE. However other casual payments continued to be channeled through his bank account until March 2018 when he lost the job.

During his employment period, his employer was using his KRA PIN to pay Withholding Tax without his knowledge.

On 24/09/2018, David received an Income tax assessment order from KRA amounting to KES 5,014,068.He was subsequently summoned to KRA,Nakuru,11/03/2019.He objected the assessment on 13/03/2019 via letter. David produced P9 forms for the period 2017/2018 to prove that indeed he was an employee of the company not an independent contractor. However he didn’t produce 2016 ones. As such KRA did not assess March 2018-March 2019 since the same was covered by P9.

David’s employment letter adduced was not signed by employer. David explained that he was on probation throughout his tenure.

An objection decision was issued on 10/05/2019 confirming an assessment of KES 4.3m. KRA notified David that his objection was filed late without reasons

David also emailed the company to request for cancellation of the erroneous withholding taxes. The company had initiated the process by 11/06/2019

David appealed to the Tribunal.

He contended that could not hire a lawyer due to financial constraints. He also contended that collection of evidence took some time since he had no money to travel from his village to Nairobi (500km) to pursue his former employer.

KRA contended that it used the information available then.

In its finding the TAT stated that:

·        The objection notice was not validly lodged since David had not applied for extension of time to file appeal beyond the statutory 30 days

·        KRA did not properly advise David how to cure his late objection as such it would be unfair to levy tax on him.

·        KRA had received withholding tax certificate cancellation request as such David stood discharged from any further tax liability under the assessment

The Tribunal Final Decision was:

·        The appeal was struck out

·        David was ordered to lodge an appropriate application  for late objection

·        KRA was ordered reconsider the late objection based on the merits disclosed in the proceedings of the case at TAT

The decision was delivered on 16/07/2021