On 19 November 2018, Housemart Co Limited reached a partial settlement with the Kenya Revenue Authority in a Sh2.2 billion tax dispute, paying Sh100 million upfront while reserving the right to challenge the balance under the law.
The Chinese-owned importer, which deals in construction materials and household commodities, filed the consent at the High Court after KRA froze its bank accounts over alleged tax arrears. The agency had accused the company of using seven other firms to divert funds and reduce its tax obligations.
Justice Paul Nyamweya adopted the agreement as an order of the court and said the temporary orders were vacated, with the file marked closed. KRA also agreed to withdraw the preservation orders that had blocked the company from transacting through its accounts.
Although the matter has left the High Court for now, it may still move to the Tax Tribunal because the consent allows Housemart to pursue the tax assessment through the proper legal channels.
In its court filings, Housemart denied any wrongdoing and said the freeze on its accounts had crippled its business. The company asked the court to lift the restriction and said it had no links to the firms that received money on its behalf.
Housemart said some of the entities named by KRA were its suppliers. The firms listed in the dispute were Colila Limited, Akubi Limited, Nkemm Limited, Obeset Kenya Limited, Sunda (Industrial) Company Limited and Wise Databank Limited.
KRA maintained that the companies were registered by Housemart and had received sales proceeds on its behalf. The tax authority also said deposits were made by Housemart employees or by cash-in-transit companies contracted by the firm.
