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KRA ‘forgives’ ex-Nairobi Governor Sh400 million taxes after agreement

Former Nairobi Governor Evans Kidero has been exempted from paying Sh427 million in a tax arrears dispute following an out of court settlement.

Vide a signed settlement agreement filed at Court of Appeal, Dr Kidero, who served as Nairobi’s first Governor between 2013 and 2017, got a waiver of Sh407,780,612.

From the registered consent,the former governor will now only pay a paltry Sh19,989,183 of the total of Sh427,269,795 that was being claimed from by the taxman.

In the signed consent agreement filed in court by lawyers James Ochieng Oduol (for Kidero) and Leparashao Naeku Patricia, Dr Kidero undertook to pay a revised amount of Sh19, 489,183, which comprises the principal sum of Sh12.038.982, a penalty of Sh2,407,79876 and an interest of Sh5,036,405.

The lawyers agreed they are ‘cognizant the interest may vary upon amendments of the assessments in the iTax and therefore agreeable to thus variation’.

In giving the politician a clean bill of health, the court adopted an out of court settlement agreement between Kidero and Commissioner Investigations and Enforcement at the Kenya Revenue Authority (KRA).

In the consent recorded at the court of appeal Kidero and KRA agreed that he pays Sh 19 million inclusive of a penalty of Sh 2,407,796 and an interest of Sh 5,036.405 million.

Kidero had renegotiated the colossal tax waiver from Sh 427,269,795.00 million which KRA had sought he pays for the period covering 2011, 2012 and 2015.

According to the consent filed in court, Kidero was cleared to pay of Sh 12,038,942 on August 23, 2023 being the principal tax claim following the review.

The dispute began in 2016, when the KRA audited Kidero’s financial and business accounts from January 2011 to December 2015 and issued him with a Sh 680million tax bill that included penalties and interest.

He challenged the taxation at the tax appeals tribunal, claiming Sh423 million of the money demanded were campaign donations.

However, after the tribunal ruled in favor of Dr Kidero, the taxman appealed at the Supreme court, which ruled he lacked proof that the money came from his campaign accounts and allowed the KRA to collect the disputed amount.

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