KRA to challenge court decision to quash Ksh.15 billion contract

KRA has moved to the court of appeal to challenge a High Court decision that annulled a Ksh.15 billion contract awarded to SICPA securities for the supply of Excisable Goods Management Systems (EGMS).

According to KRA, Justice John Mativo misunderstood and misapprehended the purposes and import of EGMS as an information technology tool for tracking, tracing and accounting for all excisable goods and not a new imposition of taxation as the judge appears to have taken it in his judgment.

KRA claims that it started the implementation of EGMS way back in 2013 under the now repealed Customs and Excise Act and Legal Notice No 110 of 2013 of Customs and Exercise.

“The judge erred in law by finding the said legal notice number 110 of 2013 and 53 of 2017 were meant to impose a new taxation yet they were only meant to enable the implementation of EGMS,” read the documents.

KRA claims that Justice Mativo judgment has thrown the country’s revenue collection into a quagmire in so far as the implementation of EGMS is concerned.

Meanwhile SISPA securities SOL.SA, a company whose tender was nullified, has also filed an appeal claiming that the judge erred in failing to appreciate that KRA was well within the confines of law in directly procuring the services.

The International Company which was to provide KRA with EGMS further argues that judge failed to appreciate that public participation is not a requirement for direct procurement.

They want the court of appeal to set aside the decision of the high court.

“The learned judge erred in law and in fact by ignoring the findings of the special audit report of the auditor general on EGMS that revealed that the implementation of EGMS did not result in any increase of costs to the consumer and therefore there was no evidence that the other manufactures would not follow suit,” reads court documents.

The company claims that the judge misunderstood the purpose and import of the EGMS as an information technology tool for tracking, tracing and accounting for all excisable goods and the duty liable and that it is not a new imposition of taxation.

The company says that as a result of the high court decision, it will suffer severe financial losses as it would be forced to uninstall and scrap the high tech equipment that it has deployed in Kenya.