KRA stops dissolutions over arrears

Wednesday, March 22nd, 2023 01:34 | By
Taxman faces pressure in Sh3.64tr budget plan
Kenya Revenue Authority headquarters, Nairobi. PHOTO/Print

Kenya Revenue Authority (KRA) has lodged objections to the intended dissolution of 1,092 companies claiming they owe it in excess of Sh1.15 billion in unpaid taxes.

In a statement, the regulator said the companies seeking voluntary dissolution had submitted applications for voluntary strike-off while still owing tax debts to the government, which they ought to have paid.

“KRA has raised concerns and demonstrated to the Registrar (of Companies) why the companies should not be dissolved pending unsettled tax liabilities,” read the statement in part. 

90-day notice issued

During the period July 2022 to March 2023, the companies through the Registrar of Companies issued 90-day notices through the Kenya Gazette alerting the public of their intended voluntary dissolution, prompting KRA to raise concerns.

The notices invited the public to share any reasons why the companies should not be dissolved.

The 1,092 companies cut across various sectors and range from single proprietor businesses, family-owned firms and local subsidiaries of international firms.

“KRA requires directors of companies due for closure, to pay their tax debts before submitting their applications to the Registrar. This will ensure the companies are compliant and that the tax issues are resolved amicably,” the taxman said.

The Companies Act 2015 requires companies to provide copies of their application for voluntary dissolution to all their creditors, including the KRA, within seven days of submitting applications to the Registrar of Companies.

This comes amid as the taxman is on the spot amid fears that Kenya Revenue Authority (KRA) is likely to miss its collection target for the year ending June 30 if the total receipts for eight months to February are anything to go by.

Statement of Actual Revenues and Net Exchequer Issues by the National Treasury for the period to February 28 shows the revenue agency has so far collected Sh1.23 trillion against a target of Sh2.1 trillion.

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