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Economy

Taxman rejects GDC push for Sh3.4bn waiver

Geothermal Development Company engineers at a
Geothermal Development Company engineers at a project site in Nakuru. FILE PHOTO | NMG 

The Kenya Revenue Authority (KRA) has rejected appeals by the Geothermal Development Company (GDC) for corporate tax waiver amounting to Sh3.4 billion, worsening the woes of the agency tasked with developing the country’s steam fields.

The corporate tax arrears account for 73.9 percent of the Sh4.6 billion that the GDC owed suppliers and service providers as at December 31,2018.

“The corporation tax liabilities are mainly historical. We appealed to KRA to waive interests and penalties of the corporate income tax but we have not been successful,” GDC managing director Johnson ole Nchoe told the National Assembly Committee on Energy.

The GDC has lately been in the eye of the storm with both Parliament and the Ethics and Anti-Corruption Commission putting the firm on the spot over claims of irregularity in procurement of drilling rigs, staff mismanagement and financial impropriety.

It now joins State-owned millers on the list of debtors that owe the taxman billions of shillings.

Five State-owned cane millers; Mumias, Nzoia, South Nyanza, Muhoroni and Chemelil collectively owe KRA Sh17.1 billion.

Aside from the KRA, the GDC owes Naivas Ltd, Mater Hospital, Kenya Pipeline, Kenya Power, the Municipal Council of Nakuru, and Kenya Meat Commission among other tens of suppliers and service providers money.

Arrears cumulate

Mr Ole Nchoe told the committee that reduction of disbursements from the exchequer worsens the situation as interest and penalties on the arrears cumulate by the day.

The pending bills revelations come amid a bitter dispute between the GDC and its former landlord, Sabco Millers Limited, for running down its premise and failing to renovate it after vacating the building.

Last month Sabco obtained a judgement against the State firm which it had sued for Sh28.9 million compensation.

GDC’s woes came to the fore last June when more than 700 employees issued a strike notice citing poor working conditions and low pay.

The employees, through the Kenya Electrical Trades and Allied Workers Union (Ketawu), demanded that the GDC implements the collective bargaining agreement for the period January 2017 to December 2020, among a raft of other demands.

The GDC was formed in 2008 to drill geothermal fields.

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