A Ksh5.6 billion dispute between the Kenya Revenue Authority (KRA) and the Coca-cola company will now be decided in the the Supreme Court.
In the dispute which started in 2009, KRA claims that the Coca-cola company failed to pay taxes on costs incurred during washing and sanitising of returned bottles.
The Court of Appeal overturned a High Court decision, which allowed the taxman to levy tax on returnable containers, prompting the taxman to move to the Supreme Court.
Coca-cola’s three franchises in Kenya, Mount Kenya Bottlers, Rift Valley Bottlers, Nairobi Bottlers and Kisii Bottlers, opposed the move saying that the the case did not involve interpretation of the Constitution.
“In view of the reasons tendered, we find that this court has jurisdiction in respect of this appeal. Having so found, we have no option but to dismiss the preliminary objection,” ruled the Supreme Court.
The Court of Appeal had last year ruled that the taxation was unlawful since it would amount to multiple taxation.
Former Finance minister David Mwiraria had changed the laws hence subjecting the bottlers to taxation for returned bottles and crates. However, the franchises moved to court to oppose the change, arguing that the bottles and crates were never sold to consumers.
Mwiraria’s change was scrapped in 2010, but KRA argued that Coca-Cola never paid the taxes when the law was active, amounting to Ksh5,620,730,161 on account of arrears of excise duty, VAT and interests.