Kenya’s High Court shot down a plan to levy a minimum tax of 1% on total sales, saying it was unconstitutional.
The tax, which was due to take effect at the start of 2021, is now annulled, Judge George Odunga ruled on Monday. “It results in diminishing capital for those making losses, while for those making profits the capital base is unaffected,” he said.
Business owners who challenged the new tax in court said it was “unconstitutional, unlawful and devastating.” The measure could have raised about 21 billion shillings ($190 million) for the Treasury annually, according to lawmakers. It was meant to ensure companies that perennially report losses also contribute to government programs, they said.