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Rift Valley Railways Ordered To Pay KRA Ksh1.6 Billion In Taxes


The Tax Appeals Tribunal has ordered the Rift Valley Railways (RVR) to pay the Kenya Revenue Authority (KRA) Ksh1.69 billion in unremitted tax.

RVR had petitioned to block KRA from recovering the amount, arguing that some of the equipment it imported among them locomotives and diesel engines were tax exempt.

The tribunal however found that the items were taxable, hence KRA was right in demanding the amount.

“This therefore leaves room for one reasonable conclusion; that the appellant (RVR) was not granted remission in respect of the locomotives and as such the taxes as assessed by the respondent (KRA) are properly due and payable by the appellant,” the Tribunal ruled.

The tax demand followed a 2011 and 2016 tax assessment against RVR in respect of customs duty, value added tax, withholding tax and withholding VAT.

Read: Letter to the Director of Immigration over Illegal Brazilian Workers at Rift Valley Railways

In its submissions, RVR argued that it had obtained VAT remission from Ministry of Finance for  items such as train simulator system, tamping and ballast distributing machines, knock down kits and diesel engines.

KRA also accused RVR of undervaluing freight charges on six imported locomotives in December 2014.

“Accordingly, we find that the taxes assessed by the respondent in respect of the locomotive, spare parts, diesel engines, train simulator and the tamping machine are owing to the public purse and should be settled by the appellant,” the tribunal ruled.

Some items the company claimed were exempted had been left out by the Treasury in a letter dated August 15, 2011, the Tribunal found.

RVR only got a reprieve of Ksh56.7 million after providing documents to support payment.

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Written by Francis Muli

Follow me on Twitter @francismuli_. Email

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