Companies

KenolKobil disputes tax claim on S Sudan exports

OHANA

KenolKobil managing director David Ohana. FILE PHOTO | NMG

The Kenya Revenue Authority has locked horns with KenolKobil #ticker:KENO over tax assessment on a consignment that was destined for South Sudan but was allegedly diverted into the country.

KenolKobil has denied diverting the consignment and has instead filed a case in court challenging KRA’s decision to bill it Sh59 million tax arrears.

KenolKobil in its application claims that the taxman has already written to its banker, Stanbic, demanding release of the Sh59 million.

“That unless leave is granted to quash the respondent’s decision dated May 29, 2018 and June 4, 2018 and the leave given operate as a stay, there is a real danger that the applicant’s bank will pay the substantial sums assured in the transit bonds having been called by the respondent thereby jeopardising the applicant’s business,” says KenolKobil managing director David Ohana.

The High Court has since issued temporary orders suspending the tax demand.

Mr Ohana says that the normal practice is that clients assume full responsibility once the product is sold and collected by the customers’ trucks from kenolkobil’s depots. The trucks are cleared and sealed in the presence of KRA officials.

Mr Ohana notes that on reaching the border the trucks are again inspected by officers from Uganda Revenue Authority (URA) and KRA to confirm their exit.

But KRA in its response notes that it has established that 119 consignments destined for South Sudan through Uganda did not exit the country.

He notes that KRA had issued confirmation that the consignment had exited the border and should not again turn around and claim taxes on it.

The taxman notes that KenolKobil failed to produce any evidence that the products exited the country even after being given an opportunity to do so.

KRA says it obtained data from URA and reconciled with the information in its position that allegedly revealed that goods did not leave that country as declared by KenolKobil.

Lawyers representing the two sides on August 29 told justice John Mativo that they are in talks with a view of settling the matter.