Former Nairobi Governor Mike Sonko has vowed to move to the High Court after losing a Sh385 million tax dispute with the Kenya Revenue Authority (KRA).
This will escalate his long-running legal battle with the taxman.
Sonko is expected to challenge a decision by the Tax Appeals Tribunal, which dismissed his appeal against a tax assessment arising from 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.
He maintained that the disputed deposits did not constitute taxable income, arguing that the funds were derived from legitimate business transactions, loans and other non-taxable sources.
Sonko also claimed that part of the money was generated 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 deposits as undeclared taxable income after determining that Sonko had failed to provide adequate financial records to support his explanation of the funds.
The Tax Appeals Tribunal subsequently found that Sonko had not provided sufficient documentation to rebut KRA’s assessment, leaving him liable for the 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 began after KRA scrutinised deposits made into Sonko’s accounts as part of efforts to establish whether the funds constituted taxable income. Sonko contested the assessment, arguing that the tax authority had wrongly classified various deposits as taxable income without adequately considering their sources.
The latest ruling represents another setback for Sonko in his tax dispute with KRA, but the former governor has vowed to continue pursuing the matter through the courts.
His planned appeal before the High Court will focus on whether KRA was justified in treating the disputed deposits as taxable income and whether Sonko can provide sufficient documentation to establish the source and nature of the funds.
The Sh1.4 billion in transactions under scrutiny spans the period between 2013 and 2019, when Sonko rose to prominence in Kenyan politics and later served as Nairobi governor.
The High Court will now provide another avenue for Sonko to challenge the tribunal’s findings and seek to overturn the Sh385 million tax liability.
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