BY SAM ALFAN.
It is a win for Kenya Revenue Authority after a tax appeals tribunal in Nairobi has ordered the Rift Valley Railways Kenya Limited to pay Sh 1.6 billion tax debt.
In its judgment, the tribunal ordered the railways company to pay Sh 1,639,516,383 comprising custom duty, value added tax, withholding tax, income tax and withholding value added tax.
However, the company got a reprieve after the tribunal reduced the tax by Sh 56,717,291 after they provided the requisite supporting documents.
“The appellant’s withholding tax liability in respect of local and imported services should be reduced by Sh 56,717,291 for which it has correctly supported,” ruled the tribunal ruled.
The company had appealed against KRA’s tax assessment contained in an objection dated December 11, 2017 following an audit conducted for the years 2011 to 2016.
The Railways firm argued that it was granted an exemption or a waiver from taxes by the Government of Kenya on the importation of locomotives to Kenya.
However, the KRA alleged that the exemption or the waiver that was granted to the firm was either not correctly obtained or that it was not applicable to the goods they imported.
Further, the company submitted that it was being reprimanded merely because of an internally generated error on the part of the Treasury. Further, there was no part of the approval/exemption letter by the Ministry that rejected or refused to grant the appellant’s application for waiver or exemption.
“The exemption letter should have been a complete reflection of what had been approved by the Minister,” responded KRA.
Rift Valley Railways Kenya Limited is a Consortium that was established to manage the Parastatal Railways of Kenya and Uganda as well as to carry out with major investments going towards expanding and modernizing the fleet and improving rail infrastructure including the meter-gauge line to Uganda.
