Auditor- General Edward Ouko. FILE PHOTO | NMG
Electricity producer Kenya Electricity Generating Company
(KenGen) is optimistic of a reprieve from the taxman who is demanding
Sh2.43 billion tax as well as penalties and interest.
The
Nairobi Securities Exchange-listed firm attracted the compensation tax
after paying dividend arrears to the Treasury last year.
KenGen
paid dividend of Sh6.164 billion, according to an audit report by the
Auditor General on the company for the year ended June 2017. It has been
negotiating for a waiver of penalty and interest by the Kenya Revenue
Authority in talks that started a year ago.
KenGen’s
Finance and ICT director John Mudany said if the company secures the
waiver from the Kenya Revenue Authority (KRA) it would allocate the
undisclosed funds to its ongoing capital intensive projects.
“We are still in discussions. We are hopeful they will look at it with favour,” Mr Mudany said an in interview.
“If
we are forgiven, we will invest the money into putting up more power
plants and achieving the governments own vision of cheap energy. The
money can do a lot.”
Compensating
tax is a secondary levy charged upon the distribution of untaxed
income. It largely arises when dividends are paid out of untaxed profits
or reserves.
KenGen has benefited from massive investment deductions on its capital projects in recent years.
The
Auditor- General stated in his report on KenGen that Kenya Revenue
Authority, which had earlier issued a demand letter for the payment of
the principal amount of the tax, interest and accruing penalties, had
dug in on its position over the payment.
“The company
has not received the waiver in respect of interest and penalties. I
understand from management that KRA has indicated willingness to waive
the interest and penalties if the principal tax is paid,” said the
Auditor- General.
No comments :
Post a Comment