Health secretary Mutahi Kagwe has successfully applied to his Treasury counterpart Ukur Yatani to exempt Hamptons Hospital from paying value-added tax on the consignment whose value the owners claim is $185.33 million.
Some of the equipment detained by the taxman include those used in radiography and radiation therapy for cancer patients as well as various cardiology and laboratory machines.
Last September, the High Court in Nairobi also stopped KRA from auctioning solar plant machines and related equipment over non-payment of taxes by Hamptons pending determination of the case before it.
A Kakamega-based hospital associated with tycoon Julius Mwale has received a reprieve in dispute with the Kenya Revenue Authority after the Treasury offered tax relief on multi-billion-shilling medical equipment and machines.
Health secretary Mutahi Kagwe has successfully applied to his Treasury counterpart Ukur Yatani to exempt Hamptons Hospital from paying value-added tax on the consignment whose value the owners claim is $185.33 million (about Sh20.9 billion) in 18 containers.
Some of the equipment detained by the taxman include those used in radiography and radiation therapy for cancer patients as well as various cardiology and laboratory machines.
Last September, the High Court in Nairobi also stopped KRA from auctioning solar plant machines and related equipment over non-payment of taxes by Hamptons pending determination of the case before it.
The hospital, based at Mwale Medical and Technology City in Kakamega County, is associated with Mr Mwale.
“The Cabinet Secretary, National Treasury and Planning approved on 8th December 2021 remission of VAT in respect of goods and services purchased locally/imported by Hamptons hospital Ltd for construction of Hamptons specialized Hospital, ” Mr Yatani says in a letter dated December 14 in response to Mr Kagwe’s request on December 4.
“The project being developed on Plot LR/No. Marama/Lunza/3313 along Hamptons Hospital Road, Butere, commenced on 21st June 2019 and is due for completion on 23rd October, 2023.”
The exemption is expected to bring to a halt a protracted legal tussle between the proprietors of the hospital and the KRA over exemption of the equipment and machinery, chiefly for treatment of cancer, from the 16 percent VAT.
The hospital owners had moved to court to stop the auction of the equipment, arguing that the law exempts the firm from paying VAT levy on goods and services related to the provision of healthcare as “recognized medical provider”.
Justice Jairus Ngaah of the High Court in September barred KRA from auctioning the equipment until the case is determined.
The taxman had told the court that the law prohibits it from demanding VAT only upon issue of exemption certificate by the Treasury secretary.
Advocates representing KRA and Hamptons are now required to file a consent in court confirming the release of the hospital equipment. The court has scheduled a mention on January 26 next year.
