Corporate News
By BRIAN WASUNA
In Summary
- KRA has agreed to pay the sum following out-of-court negotiations that will also see it drop an attachment of assets threat it had slapped Del Monte with in 2013 over a Sh141 million tax demand.
- Del Monte sued the taxman in 2013 for failing to pay it the VAT refunds despite supplying KRA with all the necessary documentation needed to authorise payments. The refunds arose from materials Del Monte imports.
The Kenya Revenue Authority (KRA) is set to pay Del
Monte Sh305 million in Value Added Tax (VAT) refunds it has failed to
remit to the food processing company since 2010.
The taxman has agreed to pay the sum following out-of-court
negotiations that will also see it drop an attachment of assets threat
it had slapped Del Monte with in 2013 over a Sh141 million tax demand.
The Sh141 million demand was the subject of another
case the fruit processor had filed against KRA, valuing the two suits
at Sh446 million.
Under the consent filed in court, KRA will pay the
sum in nine equal instalments on the fifth day of every month. Justice
Mumbi Ngugi on Wednesday adopted the consent as a court order and marked
the court case as settled.
Del Monte sued the taxman in 2013 for failing to
pay it the VAT refunds despite supplying KRA with all the necessary
documentation needed to authorise payments. The refunds arose from
materials Del Monte imports.
“We would be grateful if you would record this
matter as settled… KRA do pay the sum of Sh305,597,159 by nine equal
instalments. Each instalment will be paid on the fifth of every month.
Each party do bear their own costs of the suit,” the consent document
reads.
The taxman has started remitting the sums, as the
deal was struck before the parties filed their consent in court. KRA has
paid Sh67.9 million to Del Monte for October and November.
Del Monte said it had furnished the taxman with its
VAT returns, export documents, supply invoices and a certificate from
its auditors Deloitte & Touche showing that the amount claimed is
more than Sh1 million.
The fruit processor held that its operations had
been threatened by KRA’s refusal to pay the sum, as its business is
capital-intensive. It added that it was forced to get an overdraft
facility, as the Sh305 million had already been designated to cater for
other expenses.
Del Monte had initially demanded a VAT refund in
2011 when the amount stood at Sh102 million, but says the taxman only
paid Sh42 million then went silent.
The out-of-court deal has also seen KRA deduct its
Sh141 million demand from corporate tax overpayments Del Monte made and
was to get a refund for.
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