KRA demands unpaid tax from Malindi space station

Times Tower, the headquarters of the KRA, in Nairobi. FILE PHOTO | NMG
Times Tower, the headquarters of the KRA, in Nairobi. FILE PHOTO | NMG 

The Kenya Revenue Authority (KRA) is seeking to recover close to Sh60 million in unpaid taxes from Vitrociset, a Rome-based firm operating the Italian government’s space station in Malindi.

The taxman says Vitrociset owes the amounts for corporation tax and VAT between 2011 and 2012, following an audit of its books of accounts.

Vitrociset is a sub-contractor that was hired by the Italian Space Agency to operate the satellite tracking and launching station in Malindi.

The Italian firm in 2015 challenged KRA’s demand before the Tax Appeals Tribunal, and has now escalated its fight to the High Court seeking to dismiss the demand.

Negotiations between Vitrociset and the KRA in 2015 failed to yield any fruits, forcing the two parties to proceed with the appeal before the tribunal.

The KRA had failed to file responses to Vitrociset’s appeal within the required 30 days, but the tribunal allowed the taxman to present its pleadings.

Vitrociset now wants the tribunal to reconsider its decision and bar the KRA from filing responses to its appeal.

The Tax Appeals Tribunal’s ruling allowing KRA’s response was delivered in November, but Vitrociset failed to challenge the decision within the required 30 day window.

The Italian firm now wants the tribunal compelled to reconsider allowing KRA’s responses before proceeding to determine whether Vitrociset is liable for Sh58 million in VAT and Corporation tax.

The taxman insists is trying to hoodwink the court into issuing a temporary order to stall the March hearing.