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KRA wins in Sh1.2b tax row against Oxygen 8

By Nancy Gitonga
Thursday, September 17th, 2020
KRA headquarters. Photo/File
In summary

It is a big win for Kenya Revenue Authority (KRA) after the Tax Appeals Tribunal allowed it to collect Sh1.2 billion tax arrears from Oxygen 8 East Africa Limited.

 In its ruling, the Tribunal comprising Eric Wafula, Ngina Mutava, Wilfred Gichuki, Abraham Kiprotich and Gabriel Kitenga dismissed an application by Oxygen 8 East Africa, seeking extension to file an appeal out of time to contest the tax debt.

“The application dated June 26, 2016 is hereby dismissed and the notice of appeal dated June 3 and filed on June 4,2019 is hereby struck out,” ordered the tribunal.

Tax assessment

KRA carried out an audit against Oxygen 8 East Africa during the month of November 2018 and issued a tax assessment dated April 11, 2019 for Sh1,185,596,692 including penalties and interest. 

  Aggrieved by the KRA’s decision, Oxygen 8 East Africa Ltd filed a notice of appeal at the Tax Appeals Tribunal but failed to file a memorandum of appeal within the stipulated time.  

On June 26, the firm sought for extension of time to file its memorandum of appeal and statement of facts on grounds that its Managing Director was absent from the country and instructions were received by its tax agents after the expiry of time.

KRA opposed the application on grounds that it was incompetent.

Consequently, the Tax Tribunal ruled that Oxygen 8 East Africa Ltd had failed to provide an affidavit stating the reasons for its inability to submit the requisite documents on time. 

The tribunal in its ruling stated: “ In its own admission, the applicant has undisputed tax liability which is unpaid and it has not demonstrated to us that it has offered any payment plan for the same.”

KRA shall apply the same decision to similar applications for extension of time, for future disputes affecting other taxpayers, who do not submit the requisite documents in such disputes.

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