RIFT VALLEY RAILWAYS KENYA LTD ORDERED TO PAY 1.6B TAX TO KENYA REVENUE AUTHORITY

RIFT VALLEY RAILWAYS KENYA LTD ORDERED TO PAY 1.6B TAX TO KENYA REVENUE AUTHORITY

By Donald Kogai

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 will now proceed to collect the outstanding

taxes from Rift Valley Kenya Limited of Kshs.

1,639,516,383.