Suspension of Minimum Tax

Suspension of Minimum Tax

Tax Alert

Suspension of Minimum Tax


This alert brings to your attention the High Court’s judgment in the case of Stanley Waweru & 3 others (Petitioners) vs. National Assembly (1st Respondent), The Commissioner General, Kenya Revenue Authority (2nd Respondent) and the Attorney General (3rd Respondent) Constitutional Petition No. E005 of 2021.

The issue before the High Court was a request by the Petitioners for conservatory orders on implementation of Minimum Tax pending hearing and determination of the main case on the constitutionality of Minimum Tax.  The  Court after hearing the parties issued conservatory orders restraining the Kenya Revenue Authority (KRA) from enforcing section 12D of the Income Tax Act, Cap. 470 (ITA) on Minimum Tax. The decision by the High Court effectively bars KRA from collecting or demanding Minimum Tax pending the hearing and determination of the case by the Petitioners. 

The arguments by Petitioners and Respondents, issues for determination and findings have all been summarised here.

Our opinion on the judgment

In our view, the judgement applies to the Petitioners and other taxpayers who are subject to Minimum Tax. The conservatory orders that were issued bar the KRA from demanding and collecting Minimum Tax from all taxpayers. Indeed, the KRA has issued a press release confirming that it will abide by the High Court ruling. 

Taxpayers may therefore consider holding back on making remittances of the Minimum Tax to KRA until the case is heard and determined. However, it is important to note that should the KRA obtain a favourable decision after the main case is heard and determined, they will seek to collect Minimum Tax (including penalties and interest) retrospectively from 1 January 2021. It is therefore important for the taxpayers to carefully consider whether to make provisions for this liability as we await the outcome of the main case. 


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