Justice George Odunga declared the minimum tax as unconstitutional.
Hours after the ruling, the authority said that it disagrees with the findings of the court and will prefer an appeal to the Court of Appeal to challenge this finding.
“This is to ensure that KRA continues to review and improve on tax policies in order to reduce the tax burden while ensuring that every citizen contributes their fair share of tax.,” KRA said.
KRA added that the High Court in Machakos noted that minimum tax was unconstitutional for subjecting taxpayers to double taxation and was punitive in nature.
“The Court was of the opinion that taxation cannot be fair when a system of tax is introduced to diminish the capital of a business.”
Kenya Association of Manufacturers welcomed the ruling saying the ruling provides much-needed relief to businesses that continue to strain underweight of over-taxation and unpredictability in the country.
“It not only ensures that businesses remain open and productive and provides space for businesses to bounce back and generate the much-needed revenue to support our country,” chairperson Mucai Kunyiha said.