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KRA says sugar in Sh2.5bn tax case was imported from Dubai

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KRA boss John Njiraini. file photo | nmg

The Kenya Revenue Authority (KRA) says it has new evidence showing that 40,000 metric tonnes of sugar, which is at the centre of a Sh2.5 billion tax dispute, originated from United Arab Emirates (UAE) and not Brazil as claimed by the importer — Darasa Investments Ltd.

The taxman in papers filed at the Supreme Court on Tuesday is now asking the court to admit the new evidence, arguing that it’s vital information provided by a reputable agency of a friendly government.

The Supreme Court had stopped the KRA from demanding the tax pending the determination of an appeal lodged by Darasa Investments after the Court of Appeal reversed the decision of High Court that restrained the taxman from demanding the duty.

“The evidence…from a friendly country presented by the Ministry of Foreign Affairs to the respondents (KRA) was not available when the appellate court delivered its judgment,” says the KRA.

The taxman says it has evidence the sugar originated from Al Khaleej Sugar Company LLC in the UAE and left the Dubai’s Jebel Ali port for Kenya on October 17, 2017. The KRA says the new evidence shows that the date it left UAE was well outside the waiver period of May 12, 2017, and August 31, 2017.

The importer has held that the sugar was loaded at Santos Port in Brazil on July 15, 2017, and was to arrive on August 28, 2017, at the Mombasa port.

The KRA disputed this information and demanded duties, prompting the importer to file the suit at the High Court. It lost its claim for Sh2.5 billion tax at the High Court. Justice Eric Ogola held that the consignment by Darasa was entitled to be cleared duty-free and termed the KRA decision to levy duty on it as unlawful.

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