James Kithinji v Jamii Co-operative Savings and Credit Society Ltd
The bottom line
#A Kenyan court ruled that once an employer remits deducted PAYE to KRA, it cannot be forced to refund it — disputes over tax computation belong at the Tax Tribunal.
What this practically means
#Executive summary
#Key legal issues
#Whether an employer can be ordered to refund PAYE already deducted and remitted to KRA
No. Once remitted, the funds are no longer in the employer's custody and any dispute over the computation lies with the Tax Tribunal, not the ELRC.
The court accepted that the Respondent deducted PAYE pursuant to Section 49(2) of the Employment Act and remitted it through its April 2024 payroll. Since the deducted amount was no longer in the Respondent's possession, ordering a refund would compel double payment. The court also noted KRA's absence as a party and held the Tax Tribunal competent to examine the computation and make appropriate orders.
Whether sums awarded under Section 49 of the Employment Act are subject to statutory deductions
Yes - the Respondent's position that Section 49(2) mandates statutory deductions was not disturbed; the court did not decide the correctness of the PAYE computation.
The Respondent relied on Section 49(2) of the Employment Act and Peris Njeri Kinyanjui v Kobo Safaris Limited for the proposition that PAYE constitutes a mandatory statutory deduction. The court did not rule on whether the correct taxation method was applied, instead deflecting that question to the Tax Tribunal.
Legal principles established
#- Where PAYE deducted from a decretal sum has been remitted to the Kenya Revenue Authority, the ELRC is not the proper forum for a claim for refund of the tax; the Tax Tribunal is the correct forum.
Court orders
#- 1.The Notice of Motion dated 27th November 2025 is dismissed
- 2.No order of costs
- Jurisdiction invoked
- Original employment and labour relations jurisdiction of the ELRC under the Employment and Labour Relations Court Act; the matter arises from a decree in ELRC Cause No. 707 of 2017
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "James Kithinji v Jamii Co-operative Savings and Credit Society Ltd", Case Analysis (2026). ELRC Cause No. 707 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2458/eng@2026-09-21
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.