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NBK to Pay Ksh510 Million for Disallowed Tax Credits Claim

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The Tax Appeals Tribunal has ruled that National Bank of Kenya Limited is liable to pay taxes amounting to Ksh510,951,944.00.

The taxes arise out of disallowed credits wrongfully claimed by the bank under the Income Tax Act.

The Tribunal further held that the credits claimed by the bank under the Income Tax Act were clearly incorrect as the claim was not what is envisaged by the law.

The Tribunal, in its judgment delivered on 13th May 2021, ruled that National Bank of Kenya Limited was not justified in utilizing alleged tax overpayment to settle off its tax liabilities as the relevant law only authorizes the Authority to apply a tax over payment in payment of taxes owed by a taxpayer.

Income tax law does not provide a taxpayer with the same leeway, where after self- assessment; a taxpayer would utilize and directly apply the tax overpayment to set off taxes due, prior to the verification and ascertainment of the overpayment by the Authority.

Tax Tribunal held that the bank ought to have applied for a refund under the Tax Procedures Act, which provides for a procedure for makings claims of refund of overpaid taxes.

READ>>>>>Liquor Store Crackdowns: KRA Seizes Counterfeit Alcohol Worth Ksh1.4 Million

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