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M-Kopa locked in tax row with KRA over digital TVs

Times Tower, the headquarters of the KRA, in Nairobi. FILE PHOTO | NMG
Times Tower, the headquarters of the KRA, in Nairobi. FILE PHOTO | NMG 

Mobile based lender M-Kopa has challenged the Kenya Revenue Authority’s decision to charge VAT on solar-powered digital television sets, accusing the taxman of backtracking on an earlier decision to exempt the gadgets.

M-Kopa has sued KRA asking the High Court to intervene and order the taxman to refund it Sh35.7 million that it has paid so far.

The KRA is yet to respond to the suit but Justice George Odunga has ordered the taxman to file a replying affidavit before hearing the case on February 7, 2018.

M-Kopa says that last year KRA rendered a private ruling on an application the firm had made in regard to solar powered TV sets, which stated that the items were exempt from VAT.

“M-Kopa subsequently made an application for exemption of VAT for a shipment arriving in Kenya on July 2, 2017, and the KRA derogated from its own private ruling and denied exemption from VAT vide its letter dated July 5, 2017,”Pauline Githugu, the company’s Director for External Affairs says.

“The KRA has ignored its own binding private ruling, defied clear provisions of the VAT Act, 2013. There is therefore no doubt it will continue to illegally and unlawfully demand for payment of VAT before releasing M-Kopa’s solar equipment to the detriment of M-Kopa and numerous users of solar home products who have already ordered them and are awaiting delivery,” she adds.

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