This archive report was first published on 20 April 2020.
On April 20, 2020, Brookhouse School, a prestigious learning institution, found itself at odds with the Kenya Revenue Authority (KRA) over a Sh183.92 million tax demand.
The dispute centers around subsidized tuition fees for the children of Brookhouse School's staff, which the institution claims should not be subject to Pay-As-You-Earn (PAYE) and withholding taxes.
According to the Tax Procedures Act, the taxman can appoint banks as agents in collecting taxes, seize and auction property to recover unpaid taxes, and hold assets as security for unpaid taxes.
Brookhouse School is seeking orders from the Tax Appeals Tribunal (TAT) to bar KRA from collecting Sh140.22 million in PAYE and Sh43.7 million in withholding taxes due for the period between 2010 and 2014.
The institution argues that KRA erred in determining the PAYE due from scholarships and sponsorships to children of its staff, describing the discounted fees as non-cash benefits.
Brookhouse School also faults KRA for seeking withholding tax from payments made to Othaya Group Limited and Mauritian firm, Bellur Holdings for the construction of a log house.
Initially, KRA demanded Sh186.66 million in June 2017, but later reviewed the amount to Sh183.92 million after slashing Sh2.74 million for corporation tax.
