KRA, Lewa Conservancy row over Sh88m park fee tax

Lewa Conservancy is battling Kenya Revenue Authority (KRA) over the taxation of the park entry fees.

The KRA has moved to High Court seeking to compel Lewa, a conservancy that is based in Isiolo County, to pay Sh88 million which it says is the tax accrued before 2013.

The taxman is aggrieved by a tribunal ruling which had observed that the law exempted park entry fees from taxation prior to 2013.

“That the judgment delivered on December 7, 2016 be set aside and be substituted with an order dismissing the tax appeal No. 58 of 2016,” reads order sought by the KRA.

Lewa Conservancy is responsible for conserving wildlife resources in liaison with Kenya Wild Services.

It is home to endangered black rhino and the Grevy’s zebra, and hosts elephants, lions, giraffes, wild dogs and is also habitant to more than 400 species of birds.

KRA slapped Lewa with the Sh88.5 million tax demand notice in January 2016.

Lewa objected to the tax, arguing that KRA had earlier advised Value Added Tax (VAT) was not payable on park entry fees, the argument which taxman dismissed.

KRA held that during the tax period, park entry fees were payable at the rate of 16 per cent since the same was neither listed as exempt under VAT ACT cap 476, now repealed, neither were they zero-rated prompting Lewa to file for review at the Tax Tribunal.

The tribunal in its ruling noted that the law was not clear if the park entry fees were payable prior to amendment to the Act in 2013, which expressly excluded tour operators from paying tax.

The tribunal said since the law was not clear and KRA never issued clarification or made demand for the taxation during that period, then the park fees are deemed to have been exempted.

But now KRA says the tribunal erred in law and fact when it ruled that no clarifications was provided during the period under review.