In a legal battle that could have far-reaching consequences for one of Kenya's largest retail chains, Peter Mukuha Kago, the heir to Naivas Supermarket Limited, is locked in a KSh 777 million tax dispute with the Kenya Revenue Authority (KRA). The case, which is currently pending in the High Court, concerns a demand from the KRA that Achievo Limited, a firm that provides hiring and recruitment services to Naivas, pay the staggering amount after a recent audit of its financial records. The controversy not only highlights the ongoing tensions between the taxman and big businesses but also raises the specter of significant job losses.
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Peter Kago, who serves as the chief operations officer for Naivas and is a director at Achievo Limited, is vigorously contesting the tax assessment. In court papers, he has expressed serious concerns that the company could be wound up if the KRA is allowed to collect the money. He has issued a dire warning, stating that if the tax demands are enforced, at least 2,000 employees at the retail chain would lose their jobs. "There is no legal foundation for the outrageous tax liability of KSh 777,092,137, and the appellant/applicant (Achievo Limited) fears that the respondent may start execution proceedings unless the motion is approved and a stay is granted. More than 2,000 workers nationwide will eventually lose their jobs as a result of this, which might have far-reaching effects, including closing the appellant/applicant enterprise," Kago stated, as reported by Business Daily.
The dispute stems from an initial tax demand of KSh 962.7 million from the KRA, which was later lowered after the company filed an objection. However, when the company's appeal was rejected by the Tax Appeals Tribunal, the KRA moved to enforce its demands, sending agency letters to the company's bank accounts. This aggressive move by the taxman prompted Achievo Limited to take the matter to the High Court in a bid to secure a stay of execution and challenge the legitimacy of the tax assessment.
