Times Tower buildings in Nairobi, where Kenya Revenue Authority (KRA) headquarters are located. KRA has won a Ksh166 million tax refund case against broke Italian firm CMC di Ravenna

The Kenya Revenue Authority (KRA) on Wednesday won a case against beleagured Italian dam construction company Co-operativa Muratori e Cementisti (CMC) di Ravenna, which was seeking a Ksh166 million tax refund.

On Wednesday, High Court judges Lady Justice Pauline Nyamweya and John Mativo dismissed the case filed by CMC Di Ravenna Kenya, a company contracted by Rift Valley Water Services Board to construct Itare Dam at Ksh28.9 billion.

Through an ex parte Judicial Review application earlier filed at the High Court, CMC Di Ravenna Kenya had sought to recover the VAT refund while contending that the project was fully funded by various Italian banks and therefore, all services made to the project were zero rated as per the East African Community Customs Management Act and VAT Act, 2013.

However, in a defense submission led by KRA Legal Services Commissioner Paul Muema Matuku, the revenue authority, informed the court that the services were not zero rated.

In their ruling, Lady Justice Nyamweya and Justice Mativo struck out the suit noting that the firm had failed to follow the laid down procedures in seeking relief for tax matters.

Justices Nyamweya and Mativo noted that the firm had also failed to disclose that there was an appeal pending before the Tax Appeals Tribunal.

“Given that the nature of the applicant’s case may change depending on the decision made by the Tax Appeals Tribunal, it may be prudent and more orderly for the Applicant to commence fresh proceedings, if it is still desirous of moving this court for judicial review orders,” the two judge bench noted.

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CMC Di Ravenna Kenya had argued that Itare Dam Project is classified as an official funded project under East African Community Customs Management Act of 2013, and Value added Tax 2013.

The firm however expressed regret that KRA had declined its application for refund of VAT, noting that the project was not zero rated.

{See also: EACC: Waititu ‘paid millions to his own firms’}

CMC Di Ravenna Kenya is the Italian firm being investigated by the Directorate of Criminal Investigations (DCI) over allegations that the firm was paid Ksh65billion to construct Kimwarer and Arror dams in Elgeyo Marakwet County and Ksh29.8 billion for the construction of Itare Dam in Nakuru County irregularly.


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