Former Nairobi Governor Mike Sonko is set to move to the High Court after losing a Sh385 million tax dispute with the Kenya Revenue Authority (KRA), escalating his long-running battle with the taxman.
Sonko is expected to challenge the decision after the Tax Appeals Tribunal dismissed his appeal against a tax assessment linked to Sh1.4 billion deposited into 11 of his bank accounts between 2013 and 2019.
“I am not giving up on this matter. I will take the fight to the High Court because I believe I have sufficient evidence to demonstrate that these funds were not undeclared taxable income,” Sonko said.
Sonko maintains that he has sufficient evidence to challenge KRA’s assessment and clear the disputed tax bill.
He argues that the deposits were not entirely taxable income, saying some of the funds were proceeds from business transactions, loans and other non-taxable sources. He also maintains that part of the money came from the sale of lucrative parcels of land in the coastal region.
“The Sh1.4 billion in question did not simply appear in my accounts. There were legitimate transactions behind the money, including proceeds from the sale of property, business dealings and loans. I will provide the necessary documentation to demonstrate the source of these funds,” he said.
KRA, however, treated part of the inflows as undeclared income after determining that Sonko had not provided adequate supporting financial records.
The tribunal found that Sonko had failed to provide sufficient financial records to rebut KRA’s assessment, leaving him liable for the disputed Sh385 million tax bill.
“I respect the decision of the tribunal, but I disagree with its findings. My position is clear: I have nothing to hide, and I am prepared to pursue every legal avenue available to prove my case and challenge KRA’s assessment,” Sonko said.
The dispute arose after KRA scrutinised deposits made into Sonko’s accounts and sought to establish whether the funds constituted taxable income. Sonko contested the assessment, arguing that the revenue authority had wrongly treated various deposits as taxable income.
The latest ruling marks another setback for Sonko in his tax battle with KRA, but the former governor has vowed to continue fighting the assessment.
His planned appeal before the High Court will now put the focus on whether KRA was justified in treating the disputed deposits as taxable income and whether Sonko can provide sufficient documentation to explain the source and nature of the funds.
The Sh1.4 billion in transactions at the centre of the dispute spans the period between 2013 and 2019, when Sonko was a prominent political figure and later served as Nairobi governor.
The High Court will provide Sonko with another opportunity to challenge the tribunal’s findings and seek to overturn the Sh385 million tax liability.
