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Westgate Shopping Mall owner sues KRA over Sh1 billion claim

By Kamau Muthoni | Published Tue, September 4th 2018 at 00:00, Updated September 3rd 2018 at 21:04 GMT +3
Kenyan soldiers clearing the top floor of the Westgate mall in Nairobi on September 24, 2013. Al-Qaeda-linked Islamist militants were claiming they were still holding hostages where at least 65 people were killed. [File, Standard]

Westgate Shopping Mall owner, Sony Holdings, has moved to court to challenge Sh1.1 billion tax assessment by the Kenya Revenue Authority (KRA).

According to KRA, the firm owes it a corporation tax of Sh751 million and has not paid Value Added Tax totalling Sh390 million and withholding tax of Sh25 million.

KRA is demanding the amount drawn from 2014 and additional Sh176 million as interest.

But the firm in its court papers filed by lawyer George Oraro argues that Kenya's Caesar is unfair and unreasonable considering its losses streak after the 2013 terror attack. From the September 21, 2013 terror attack, the court heard that West Gate incurred a total of 7.2 billion losses, which emanated from damage and rent loss. After the attack, Sony Holdings alleges that it used Sh4.4 billion to reconstruct the building.

According to Sony Holdings, it had insured its business from political violence and property damage with Kenindia Insurance. 

Rental income

The Sh600 million cover was to cushion it from loss incurred from damages and Sh1.2 billion was for the loss of rental income.

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The firm claims that KRA continued to assess taxes and collected the same despite knowing that the company was not making a profit.

 “From the period of terrorists’ attack to date, the respondent abused its powers to assess and collect the tax as provided in law, subjected the applicant to numerous arbitrary tax assessments, which have bogged down the applicant and which are oppressive, wanton and unfair,” argued lawyer Oraro.

“Considering the fact that the matters companied of herein concern issues of abuse of power, illegality, unfairness, and violation of the right to fair administrative action and legitimate expectation, the proper avenue for determining the same is this court.”

Sony Holding had last year asked Treasury Cabinet Secretary Henry Rotich to exempt it from paying taxes owing to the losses. The firm also argued that KRA owes it Sh33 million tax refund for 2012 to 2014.

According to Sony Holdings director Alex Trachtenberg, Westgate Mall is the main source of revenue.

 


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