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Kiambu County has shown KRA dust.
KRA audited the county.
And found the county was collecting serious money from:
- Parking fees
- Business licenses
- Market fees
- Renting stalls
- Renting stadia
- And other county fees
Then KRA asked:
- Where is our VAT?
- If you charge 10,000 for stalls
- You should have added 16% VAT
So Kiamburians should have paid: 11,600
And the extra 1,600 goes to KRA.
But Kiambu did not charge VAT. So KRA became dramatic and said:
- No problem. You'll give us that VAT from your own county coffers.
It is at that moment that, Gov Wamatangi knew hii si mchezo.
He ran to court.
He argued:
- The county is not a business entity.
- It is a government unit performing public functions
- It does not operate for profit
- The county fees charged are already a form of tax
- Charging VAT on them is double taxation
- It is illegal
The court agreed.
And KRA’s VAT demand was set aside.
This is a big precedent.
It means:
- County services should not be inflated by VAT.
- Public services are not businesses to charge 16% VAT.