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Kenya

Court of Appeal rules that KRA has legal power to search any premises and seize goods or documents

NAIROBI, Kenya, Apr 27 – The Court of Appeal has in a landmark ruling upheld that the Kenya Revenue Authority (KRA) has legal power to search any premises and seize goods, documents or storage device as per the provisions of the Tax Procedures Act.

The powers to search any premises and seize goods, documents or storage device are donated to Kenya Revenue Authority by Section 44 and 60 of the Tax Procedures Act.

However, by a judgment delivered on 16th May 2018, the High Court sitting in Nairobi, in Dr. Robert Ayisi vs. Kenya Revenue Authority, held that the two Sections of the law serve to limit the rights of a person guaranteed by Article 31 (b) of the Constitution.

The Court went on to hold that the Section 44 and 60 of the Act did not pass the test set out under Article 24 of the Constitution which requires that any law limiting the rights guaranteed by the Constitution must be reasonable and justifiable in an open and democratic society.

Dissatisfied with the decision of the High Court, KRA launched an appeal to the Court of Appeal and sought to stay the judgment of the High Court.

In a landmark ruling, the Court of Appeal Judges Martha Koome, Fatuma Sichale and Jamila Mohamed found merit in the arguments advanced by KRA that it if curtailed from enforcing the provisions of Section 44 and 60 of the Tax Procedures Act, the orders issued by the High Court had far reaching implications and they would cripple Kenya Revenue Authority in execution of its mandate to enforce tax collection.

The Court of Appeal also appreciated that colossal sums of money in taxes were likely to be lost and in the event that the appeal succeeds, the loss will be irreversible.

The Court also held that this was a unique case that has a public interest, bearing in mind the mandate of the Kenya Revenue Authority as a tax collection agency on behalf of the people of Kenya.

Thus the Court held that it is imperative that the provisions of the law that were nullified by the High Court be subjected to a second opinion of the Court of Appeal before they are amended.

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The Court of Appeal has therefore stayed the entire judgment and orders of the High Court save for the order barring KRA from arresting former Nairobi County Secretary Dr. Robert Ayisi, which order remains in force.

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