JUDGMENT OF THE COURT
The central issue in this appeal is whether a chargee upon exercise of its statutory power of sale is obligated to pay Capital Gains Tax (CGT).
A brief background will provide the context. In a notice published in the Daily Newspaper of 4th October, 2016, the appellant, Kenya Revenue Authority (hereinafter KRA), discontinued the manual payment of both Stamp Duty and CGT and required the simultaneous payment of both taxes online. The effect of this was that the I-Tax system would not permit the payment of Stamp Duty on a transfer unless and until the CGT was also paid.
The respondent, being an Association of forty-two (42) licensed commercial banks, one mortgage finance bank and two microfinance banks was aggrieved by the appellant’s action to twin the payment of CGT and Stamp Duty as it contended that this would be an infringement on the right to property of both the bank as a chargee and the purchaser and would place the burden of paying the chargor’s liability on …