Mining firm appeals to KRA over Sh1.8b unpaid tax refunds

Base Titanium External Affairs Manager Simon Wall (right) with journalists during a teleconference with Base Resources Managing Director Tim Carstens in Nairobi yesterday. [PHOTO: ELVIS OGINA]

Australian firm Base Resources is claiming more than Sh1.8 billion from Kenya Revenue Authority (KRA) in tax refunds.

The firm, which mines titanium in Kwale County through its local subsidiary Base Titanium, said while the general operating environment in Kenya remains fairly predictable, KRA and the National Treasury need to work out a way of handling Value Added Tax (VAT) refunds, which it said were affecting its operations.

In an update on its activities at the Coast yesterday, the firm said it received Sh100.5 million in VAT refunds during the quarter to December 2016.

“Base Resources has refund claims for VAT paid in Kenya, relating to both the construction of the Kwale Project and the period since operations commenced, totalling approximately $18.2 million (Sh1.8 billion) at 31 December 2016,” said the firm’s Managing Director Tim Carstens in an update through a conference call.

“These claims are proceeding through the KRA process, with a number of operational period claims, totalling approximately $1.5 million (Sh154 million), settled during the quarter. Base Resources is continuing to engage with the Kenyan Treasury and the Kenya Revenue Authority, seeking to expedite the remainder of the refund.”

Mr Carstens said while the operating and regulatory environments in Kenya are stable and predictable, the National Treasury needed to relook the policy on VAT refunds.

“Treasury should ensure that they (VAT refunds) are not impacting negatively on the operations of businesses,” he said.

Mr Carstens also said the firm is looking at expanding its mining activities in Kwale. It has already acquired a special prospecting licence and undertaken preliminary studies with a view of expanding the Kwale mines to the south.

He said the firm plans to start exploratory drilling this quarter. “We should over the next three to six months announce as to what has been discovered and towards end of 2016, we will be making decisions about whether that results in an extended mine life or if there is something that can be mined economically,” said Mr Carstens. He said the company will also undertake exploratory drilling in northern Tanzania where it has four licences to prospect for minerals in the course of the first half of this year.

“The company has commenced the process of obtaining the necessary consents and clearances ahead of a planned preliminary drilling programme across all four licences,” he said.