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Airtel locks horns with KRA over ‘TV antennae’ imports

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Airtel has gained a significant market share in the recent past. FILE PHOTO | NMG

Airtel Kenya is locked in a court battle with the Kenya Revenue Authority (KRA) over the importation of equipment the taxman suspects are meant for TV and radio and not voice calls.

The firm wants the court to order the Commissioner of Customs to release the dish-like parabolic antennae, which is being held at the Port of Mombasa.

It also seeking the taxman to be stopped from issuing agency notices — which compel third parties to release cash to KRA — on the basis of TV antennae that attract higher taxes compared to those used by mobile phone firms.

The KRA reckons that the aerial telecommunication kit are for broadcast and attract different taxes from those of phone communication.

However, Airtel says the move is unfair, unreasonable and it stands to lose because its business operations will be grounded.

The firm says the agency notices issued to its bankers has seen the return of cheques meant for Airtel customers and suppliers.

Through Mwalo Omondi, the company said it has filed for review of the KRA decision in line with East African Community Customs Management Act, which is pending.

The taxman has declined to release the antennae until the row is settled, prompting the court action.

Airtel wants the release of the equipment and withdrawal of the agency notices pending the hearing and determination of the review.

Ms Lillian Mugo, the legal manager of Airtel, said the company has been importing the parabolic antennae since 2009 and paid duty of 10 per cent.

Ms Mugo said Airtel banker has informed the company that it shall proceed and comply with the agency notices issued by KRA and transfer money to KRA.

“That the applicant’s bank wrote to us informing us that in absence of any court or revocation from the respondent they will proceed and comply with the notices,” she said in a sworn statement.

The mobile provider is aggrieved by seizure of the equipment, claiming completion of some of its projects have been delayed as a result.

Airtel is upgrading its network to match rising users that has seen it gain market share, eating into market leader Safaricom’s turf.

Airtel’s subscribers rose 11.9 per cent to secure a market share of 21.4 per cent in the quarter ended June, regulator Communication Authority's data shows.

Safaricom subscriber market share has plunged to 65.4 percent from 72.6 percent in June last year.