Court holds that expatriates must pay tax to KRA

Expatriates working for local charity organisations but drawing salaries from head offices outside the country will have to continue paying taxes to the Kenya Revenue Authority following a court ruling.

Justice Isaac Lenaola dismissed a suit filed by UK-based HelpAge International, which was seeking to exempt the charity’s expatriate staff from PAYE, a move that would have opened the floodgates for other non-profit organisations to demand similar relief.

The judge held that HelpAge had acknowledged that its expatriates are liable to PAYE, as it had already made part payment to clear the Sh17.1 million demand by the KRA.
The judge added that HelpAge admitted liability of the taxes by requesting for a waiver from the Finance minister and the KRA.

HelpAge had argued that its three expatriates draw their salaries from its London office, and that they also pay taxes to the United Kingdom hence should be exempted.

The firm added that the Finance minister’s eight year delay in responding to the waiver application led it to believe that the request had been granted.

“I say so because the petitioner by letter and conduct accepted liability for those taxes and the fact that its prayer for a waiver or abandonment was rejected, is no ground to argue that the taxes were not due.

“To the contrary, that is a ground for admission of liability. It even paid the same partly and its inability to pay now is no excuse to approach this court in the manner that it has done,” Justice Lenaola ruled.

The taxman argued that HelpAge had not relied on any law in demanding that its expatriates be exempted from paying taxes.

KRA added that it had no authority to exempt anyone from taxes hence the request it received from HelpAge could not be granted.

HelpAge works to assist elderly people who are unable to support themselves and their families financially.

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