Rift valley railways Kenya Limited ordered to pay Kshs. 1.6 Billion Tax

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BY CORRESPONDENT,NAIROBI,1ST OCT 2020-The Rift Valley Railways Kenya Limited has been ordered to pay Kshs. 1.6 billion tax to  Kenya  Revenue  Authority  (KRA).  This  follows  an  order  by  the  Tax  Appeals Tribunal in a Judgement delivered on 25th  September, 2020.

The  railway  company  had  appealed  against  KRA’s  tax  assessment  contained  in  an objection  decision  dated  11th  December  2017  following  an  audit  conducted  for  the years 2011 to 2016.

In the audit KRA examined the records and the operations of the railway company and raised an assessment of Kshs. 1,696,233,674 comprising Custom Duty, Value Added Tax, Withholding Tax Income Tax and Withholding VAT.

Aggrieved  by  the  decision  of  KRA,  the  railway  company  filed  an  Appeal  on  24th January  2018,  where  it  sought  for  orders  that  the  additional  taxes  be  struck  out, confirmation of assessment be declared unfair and enforcement of  the demand for the tax to be set aside.

KRA opposed the appeal on the grounds that the additional taxes had been raised in accordance with, and were justified under the Tax Procedures Act.

In its Judgement the Tax Appeals ordered the railway company to pay Kshs. 1,639,516,383 comprising Custom Duty, Value Added Tax, Withholding Tax Income Tax and Withholding VAT.

However, the railway company got a reprieve from the Tribunal as it was allowed to reduce  its  tax  debt  by  Kshs.  56,717,291  after  providing  the  requisite  supporting documents.

KRA can now proceed to collect the outstanding taxes from Rift Valley Kenya Limited of Kshs. 1,639,516,383.

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