Court orders Kidero to pay Sh423million to KRA

The High Court has ordered former Nairobi Governor Evans Kidero to pay the taxman Sh423,000,000.

The ruling by Justice David Majanja followed an audit by the Commissioner for Domestic Taxes on the financial and business affairs of the former governor.

The ruling came despite Kidero and the Commissioner reaching a consensus that funds raised for political party campaigns are not chargeable to tax.

Both parties, however, failed to agree on whether Kidero, who was then vying for the Nairobi governor seat, had demonstrated the funds raised had actually been expended on political campaigns.

The audits established that the proceeds from fundraisers by the former governor were being deposited together with other business proceeds into his personal bank accounts.

The Tax Appeals Tribunal had initially ruled that Kidero had shown the source of the funds and that it was up to the Commissioner to establish if the funds had been utilised for the campaigns.

The taxman appealed the decision at the high court.

In his judgement, Justice Majanja faulted the Tribunal’s judgement and held that the burden of proof was on the former governor to demonstrate that the funds raised for the campaigns were actually utilised for that purpose, and not KRA.

In the judgement dated February 4, the judge noted, "I agree with the Commissioner that the Respondent failed to discharge his burden as the evidence on record could not support the conclusions reached by the Tribunal."

"Consequently, the Tribunal erred in imposing on the Commissioner the burden of disproving the Respondent’s contention that the KES 423,000,000.00 was election campaign contributions when he had not provided sufficient evidence to surmount his obligation to establish his source of income."

He ruled that Kidero also failed to provide evidence that he received the sum of Sh74,000,000 as a loan to first purchase a property and then purchase shares.