The Kenya Revenue Authority (KRA) suffered a blow in its pursuit of Sh619.16 million in excise tax from Cooperative Bank of Kenya after a tribunal barred the taxman from collecting the money.

The Tax Appeals Tribunal (TAT) stopped the taxman from enforcing the order until Co-op Bank’s appeal against tax demands for the transactions made in 2013, 2014 and 2015 is heard and determined.

The tribunal dismissed KRA’s bid to quash Co-Op Bank’s appeal saying that the taxman relied on ambiguous clauses on definition of ‘interest, fees and commissions’ to demand the arrears.

KRA wanted the tribunal to reject Co-Op Bank’s appeal saying that the lender had failed to deduct excise duty for loan applications and moratoriums, commissions, fees and interest earned in the three years to 2015.

“The tribunal agrees with the appellant’s (Co-Op Bank) submission that the Finance Act 2012 was riddled with a lot of ambiguity,” the tribunal said its ruling. Read more