The tax waiver granted during the merger of NIC and Commercial Bank of Africa has been challenged in court.
A petition filed by Activist Okiya Omtatah wants the court to suspend the decision by Treasury to waive tax for the said merger.
Omtatah argues that the said tax waiver, which was granted on July 26 2019, but was only announced to the public on August 18, 2019, is irregular, unlawful and unconstitutional and therefore invalid, null and void.
“The tax waiver is irregular, unlawful and unconstitutional to the extent that, among others, it offends the principles of public finance in Article 201(a) of the Constitution which decrees that “there shall be openness and accountability, including public participation in financial matters,” he said.
Omtatah is seeking to stop the secretive and opaque decision by the Treasury.
“The petitioner and other taxpayers will suffer great loss estimated at some Sh350 million in lost tax revenues that would otherwise accrue to public coffers,” petition reads.
According to Omtatah, Treasury does not have the powers to arbitrarily grant the tax waiver and the court must intervene immediately to stop this abuse and improper use of power by the Treasury.
He claims that he only came to learn of the Legal Notice No. 112 and the tax waiver when it came to public attention through media reports, including the online edition of the Business Daily of Sunday August 18, 2019.
“The legal notice is yet to be published in either the regular weekly issues of the Kenya Gazette or as a special issue of the Gazette. The Petitioner perused the regular edition of the Gazette published on August 16 2019,” reads court documents.
Omtatah says that Treasury did not comply with the national values and principles of governance while promulgating the policy to grant the impugned duty waiver.
“It violated Article 4(2) of the Constitution, which proclaims that the Republic of Kenya shall be a multi-party democratic State founded on the national values and principles of governance referred to in Article 10,” he added.
Omtatah says that no other company has been accorded such a treatment which leads to it being discriminatory.
“To the extent that no other entity has been accorded such treatment, the duty waiver is discriminatory and, therefore, contrary Article 10(2)(b) of the Constitution which requires public policies to promote the national values and principles of governance including human dignity, equity, social justice, inclusiveness, equality, human rights, non-discrimination and protection of the marginalized,” reads court documents.
