A city lawyer has moved to court seeking the cancellation of a lease that the state signed Blue Nile Rolling Limited and other companies illegally exempting them from paying tax amounting to sh 188.9B.
This means that Blue Nile Rolling Limited is at risk of being compelled to clear the said arrears if the petion goes through.
City Lawyer Apollo Mboya in his petition filed at the Malindi Hogh court says that the state has done, ” Unfair Tax Administrative Action”, hence causing the country to lose billions of Shillings that would have been remitted inform of tax hence helping in the country’s rebuilding.
The agreement between the state and Blue Nile Rolling Limited and others was to run for ten years, read the court papers in parts.
Those sued in the petition include; The National Assembly, Cabinet Secretaries for Treasury and Economic planning and for Trade and investments and Industry.
The suit has also mentions the permanent Secretaries in the Ministry of National Treasury and Planning and his counter part in the Ministry of Trade, Investment and Industry.
In addition, Devki Steel Mills Limited, Kenya Association of Manufucturers, Kituo Cha Sheria, Competition Authority of Kenya, Katiba Institute, Senator Okiya Omtata and the Law Society of Kenya have been listed as the interested parties.
The petition has also dragged in the Kenya Revenue Authority Commissioner General , the Kenya Revenue Authority and the Attorney General. Both have been listed as the respondent in the case.
Court papers shows that they CS of Treasury and Trade entered into an agreement with the Blue Nile Rolling Limited and exempted it from paying both the V.A.T on inputs for building materials, Machinery production lines, equipment spares, consumables, and other supplies for direct and exclusive use in the construction of galvanized wire plant.
They also Exempt it from import duty according with the provisions of EAC customs management act 2004, Exemption of VAT on importation of raw materials to be used in the manufacturing process, Exemption from IDF and RDL on importation of raw materials for direct and exclusive use in the manufacturing process and income corporate tax to be a level of 10 percent for the first five years.
Lawyer Apollo Mboya in the Malindi high court has challenged all the provisions that the respondents relied on during the tax exemption theory.
He now wants the court to give conservatory orders preventing the 2 and third respondent who are the cabinet secretaries from exempting companies from paying tax.
” That without a shred of doubt, the 2 and 3 respondents, unless the conservatory orders sought in our petition are granted, will continue exempting companies from numerous taxes to the detriments of Kenyans, a position that can be held in abeyance since there is nothing that will be lost to both the respondents and the 1s interested party as taxation as taxation is a burden that should be borne by every Kenyan in the country through a sound legislative process,” he told the court.
He majorly wants the court to also to certify the application as urgent,
He also wants the court to declare that the agreement between the two cabinet Secretaries and Blue Nile Rolling Mills Limited was illegal .
” ThAT since since there was no governing on SOFA at the time of enacting the finance bill 2018, the 2 respondent who doubles as the Cabinet Secretary for trade illegally and in excess of the executive powers and Authority conferred issued an illegal circular in 2018, Treasury Circular No.9/2018 dated October 2018. The Circular contained Guidelines/Frameworks for tax exemption , waiver, variation or remission on a national Tax, a fee or a change,” read the court papers in parts.
He told the court that the said Circulars were never subjected to a Legislative process as required by the law.
He told the court that the illegal operating framework between the Blue Nile Rolling Mills Limited and the two cabinet Secretaries were illegal and unjustifiable.
He further told the court in papers that Blue Nile Rolling Mills Limited committment of quickly building up their factory and creating 300 direct jobs were extremly false.
He also told the court that the country lost a tune of Sh 88.9B after the said illegal agreement, urging the court to rectify the mess.
He has also filed in court strong grounds including the recent pronouncement by the court of appeal on the issue of public participation.
More to follow.
