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Pwani Oil moves to court to block KRA’s Sh130m tax demand

By Kamau Muthoni | December 5th 2014

NAIROBI: Pwani Oil Limited has moved to court in a bid to stop Kenya Revenue Authority (KRA) from demanding more than Sh130 million slapped on it for failure to remit tax between 2012 and 2013.

Fresh Fri cooking oil manufacturer in its suit filed under a certificate of urgency before High Court Judge Weldon Korir said the demand by the taxman to pay Sh134,883,572 was not only unfair but in contravention of the law.

The dispute between the Mombasa-based company and KRA arose over importation of crude palm oil for making oil products for exports.

The company says that it ought to have been exempted from paying the monies as it brought in the raw material, manufactured and exported the end products as required under remission scheme.

The condition for reduction of tax, Pwani Oil says was that they ought to have imported crude palm oil to manufacture goods for export and ensure the raw material was utilised for that purpose only.

In the suit filed by their lawyer Boniface Munyao, the company argued they had complied with the demands from the taxman, though KRA rejected certificates that had been produced to show that they had indeed exported soap and cooking oil, among other things.

“KRA’s decision to turn around and demand additional taxes notwithstanding that it had authorised the cancellation of security bonds held by Pwani Oil for the purposes of ensuring compliance with the remissions conditions is irrational, unreasonable, illegal, unlawful and unconstitutional,” Munyao said.

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