The Rift Valley Railways Kenya Limited has been ordered to pay Ksh1.6 billion tax to the Kenya Revenue Authority (KRA) following an order by the Tax Appeals Tribunal in a judgement delivered on September 25, 2020.
The railway company had appealed against KRA’s tax assessment contained in an objection decision dated December 11, 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 Ksh 1,696,233,674 comprising Custom Duty, Value Added Tax, Withholding Tax Income Tax, and Withholding VAT.
Aggrieved by KRA’s decision, the railway company filed an appeal on January 24, 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 Ksh1,639,516,383 comprising Custom Duty, Value Added Tax (VAT), 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 Ksh56.7 million after providing the requisite supporting documents.
KRA can now proceed to collect the outstanding taxes from Rift Valley Kenya Limited of Ksh1.6 billion.
On Wednesday, the taxman won a protracted battle against Highlands Water Company after the Tax Appeals Tribunal dismissed with costs, the water company’s appeal against KRA.
The water company was protesting a tax demand of Ksh155 million. The amount demanded includes interests and penalties.
