Ericsson settles Sh800m tax dispute with KRA

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

Swedish electronics giant Ericsson has reached an out-of-court deal with the Kenya Revenue Authority (KRA) following a dispute over Sh800 million in taxes.

Ericsson on Tuesday asked Justice Grace Nzioka to mark the suit it had filed against KRA as settled but did not reveal details of the deal.

The firm had sued KRA to stop it from issuing agency notices to Barclays Bank #ticker:BBK and Standard Chartered #ticker:SCBK where Ericsson has accounts.

KRA had taken measures to recover Sh800 million from Ericsson after the Tax Appeals Tribunal dismissed an objection raised by the firm.
The amount was raised by KRA in respect of taxes due for the years 2008 to 2010.

Ericsson had held that allowing KRA to attach the amount in its two bank accounts would ground its operations. Ericsson had in court claimed that as at June 2014, it had overpaid tax by Sh1.2 billion which KRA had failed to acknowledge.

The firm claimed that the taxman’s demand was unlawful.

“The KRA’s assessment dated December 30, 2015, was unlawful as the respondent demanded taxes in respect of transactions done over five years from the date of demand yet Ericsson was not required to keep records after five years,” the firm said.