Economy

Motorbike dealer to pay KRA Sh105m

kra

Times Tower, the KRA headquarters. A large part of Kenya’s rich list would be made up of people who probably would fear being trailed by tax authorities and criminal investigators. PHOTO | FILE

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Summary

  • The Kenya Revenue Authority (KRA) has been allowed to collect Sh105 million from a supplier of motor bikes for taxes not paid between 2013 and 2015.
  • In a blow to Mars Logistics Ltd, Justice John Mativo said under the VAT Act, 2013, goods in transit was not zero-rated nor was it exempted from VAT as claimed by the company.
  • The judge said the Tax Appeals Tribunal (TAT) correctly held that to qualify for zero-rated status, the service should have been specifically provided for in the law.

The Kenya Revenue Authority (KRA) has been allowed to collect Sh105 million from a supplier of motor bikes for taxes not paid between 2013 and 2015.

In a blow to Mars Logistics Ltd, Justice John Mativo said under the VAT Act, 2013, goods in transit was not zero-rated nor was it exempted from VAT as claimed by the company.

The judge said the Tax Appeals Tribunal (TAT) correctly held that to qualify for zero-rated status, the service should have been specifically provided for in the law.

“The Tribunal correctly held that the VAT Act, 2013 came into force on 2nd September 2013 thereby removing the exempt status of the sale of motorbikes, hence the appellant was not entitled to claim exempt status on the invoice dated 11th September 2016,” the judge said.

The company had appealed a decision of the TAT, dismissing its case and maintained that a levy of VAT on goods on transit amounted to double taxation.

Sam Kiplagat

[email protected]

The Kenya Revenue Authority (KRA) has been allowed to collect Sh105 million from a supplier of motor bikes for taxes not paid between 2013 and 2015.

In a blow to Mars Logistics Ltd, Justice John Mativo said under the VAT Act, 2013, goods in transit was not zero-rated nor was it exempted from VAT as claimed by the company.

The judge said the Tax Appeals Tribunal (TAT) correctly held that to qualify for zero-rated status, the service should have been specifically provided for in the law.

“The Tribunal correctly held that the VAT Act, 2013 came into force on 2nd September 2013 thereby removing the exempt status of the sale of motorbikes, hence the appellant was not entitled to claim exempt status on the invoice dated 11th September 2016,” the judge said.

The company had appealed a decision of the TAT, dismissing its case and maintained that a levy of VAT on goods on transit amounted to double taxation.