Kenya Revenue Authority (KRA) has prevented 1092 companies from closing their businesses until they settle their tax liabilities amounting to KES 1.15 billion.
KRA filed an objection at the Attorney-General’s office after the companies submitted their applications for voluntary strike-off while still owing tax debts to the government.
However, the taxman stated that from July 2022 to March 2023, companies issued ninety-day notices through the Registrar of Companies in the Kenya Gazette, informing the public of their voluntary dissolution plans.
The notices requested the public to provide any grounds why the companies should not be dissolved.
The taxman expressed concerns and provided a demonstration to the Registrar, arguing that the companies should not be dissolved due to their outstanding tax liabilities.
According to the Companies Act 2015, these companies are obligated to furnish copies of their application for voluntary dissolution to all creditors, including the KRA, within seven days of submission to the Registrar of Companies.
KRA requires directors of companies due for closure, to pay their tax debts before submitting their applications to the Registrar. This will ensure the companies are compliant and that the tax issues are resolved amicably.
Kenya Revenue Authority
The taxman has provided adequate justification to the Registrar of Companies to halt the liquidation of businesses on a provisional basis, pending the resolution of their outstanding tax obligations.
This action by the KRA coincides with the government’s efforts to eliminate revenue losses, as it endeavours to attain a revenue target of Sh3 trillion in the 2022/23 fiscal year.
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