Mastermind Tobacco, the cigarette maker owned by businessman Wilfred Murungi, was on November 20, 2018 trying to settle a Sh1.99 billion tax dispute with the Kenya Revenue Authority without going through a full court battle.
Lawyers for the company and the taxman told Justice Pauline Nyamweya that talks had made progress and asked for more time to finalise a consent. The court agreed to the request and set the matter for mention on December 5, 2018, while extending orders that barred KRA from seizing or auctioning the company’s property.
The dispute escalated after KRA sent auctioneers to recover the alleged arrears. Mastermind said it had received a notice of distress on September 19 and that the attachment process was later handed to Leakey’s Auctioneers, who gave the company 10 days to clear the debt or face a public auction of its property.
The firm, which produces the Supermatch brand of cigarettes, told the court that it feared its entire business could be wiped out if the auctioneers were not restrained. It also said it had already filed an appeal at the Tax Tribunal and wanted the demand suspended until that case was determined.
In its argument, Mastermind said the tribunal could not properly hear the dispute because it lacked quorum, with only the chairman in office after the other members’ terms expired in March. The company also accused KRA of denying it a chance to be heard, saying the demand notice was received on August 31, 2018 and that attachment of its property followed about three weeks later.
The case remained tied to the ongoing negotiations, with both sides telling the court they were still working toward a settlement.
