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.