NCBA Group has been given a preliminary court injunction barring it from paying taxes resulting from the merger of its previous sections, NIC Group and CBA Group.
On March 24, the lender filed a lawsuit when Treasury Cabinet Secretary Njuguna Ndung’u abolished the capital gains tax exemption for the merger’s transfer of shares, assets, and liabilities.
The banks merged through a share transfer at the end of September 2019, and the bank secured a capital gains tax exemption from the previous Treasury CS Henry Rotich, saving the corporation hundreds of millions of shillings.
While the lawsuit is being heard and decided, the High Court has temporarily exempted NCBA from paying taxes on the purchase.
“That I am satisfied that the application has met the test for grant of conservatory orders at this ex parte stage. Accordingly, prayer 2 of the application is hereby granted,” Lady Justice Mugure Thande ordered in a ruling issued on Thursday.
In a constitutional appeal, NCBA, whose main owners include the Kenyatta and Ndegwa families, asks the High Court to halt KRA from enforcing the orders and obtaining taxes.
Mr. Karori asserts that after the exemption decision has been made, the CS for National Treasury lacks the authority to reverse it.
The bank considerably grew as a result of the merger, earning Sh13.7 billion in net profits during the fiscal year that concluded in December 2022.
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