On November 19, 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 importer, which deals in construction materials and household commodities, filed a consent at the High Court after KRA froze its bank accounts over alleged tax arrears. The company said the action had crippled its business and asked the court to lift the restrictions.
Justice Paul Nyamweya adopted the agreement as an order of the court and marked the file closed for the time being. He also vacated the temporary orders, clearing the way for KRA to withdraw the preservation notices that had blocked the firm from transacting through its accounts.
The dispute may still move to the Tax Tribunal, since the consent allows Housemart to pursue the tax assessment through the legal process. The company had denied wrongdoing in its court papers and said it had no improper links to the entities KRA accused it of using to divert funds.
According to the tax agency, Housemart was using seven other companies to reduce its tax obligations. KRA alleged that the firms were registered by Housemart and received cash from sales proceeds on its behalf, with deposits made by Housemart employees or by cash-in-transit companies contracted by the firm.
Housemart, whose offices are on Mombasa Road, said the companies named by KRA included Colila Limited, Akubi Limited, Nkemm Limited, Obeset Kenya Limited, Sunda (Industrial) Company Limited and Wise Databank Limited. It maintained that some of them were suppliers rather than fronts for tax evasion.
The court deal left the immediate banking freeze lifted, but it did not end the underlying tax assessment. The company remains entitled to contest the disputed amount through the channels provided in tax law.
