Kenya Revenue Authority has agreed to release 40,000 metric tons
sugar owned by Darasa Investment Ltd that is at the centre of a Sh2.5
billion dispute.
KRA in a statement revealed that it
reached out of court settlement with Darasa Investment which will now
clear the Sh2.5 billion duty and VAT arrears.
The tax
was subject of a long running court battle, and Supreme Court in May
stopped KRA from demanding the sh2.5 billion from the sugar importer.
Darasa Investment had contested the tax arguing that it brought
it in during the tax waiver period granted last year and accused the
taxman of discrimination.
“The Kenya Revenue Authority
(KRA) has agreed to release 40,000 metric tonnes of sugar owned by
Darasa Investment Ltd in an out of court settlement. The agreement shall
be guided by a consent signed by KRA and Darasa lawyers, ensuring that
Darasa Investment Ltd clears the Sh2.5 billion duty and VAT arrears,”
reads the statement.
The taxman further indicated that
the firm is required to settle a Sh547,846,969 in ninety (90) days if
waiver of interest and penalties is not granted as per the East African
Community Customs Management Act.
The entry of the
sugar into the country will be subject to further clearance from Kenya
Bureau of Standards (KEBS), Port Health, Agriculture & Food
Authority and the Radiation Board.
The agreement will lay to rest a bitter court battle.
In February, KRA lost the tax claim at the high court after
Justice Eric Ogola ruled that Darasa Investment Ltd, was entitled to be
cleared duty-free by the taxman and termed the decision by KRA to levy
duty on it as unlawful.
The Judge ruled that he was
satisfied that the sugar was loaded at a port in Brazil between May 12
and August 31, the period covered by tax waiver period, destined to
Mombasa port as per the conditions set in a Gazette Notice.
But the decision was overturned by Appeal court prompting Darasa to move to Supreme Court.
KRA
says it resorted to resolving the dispute through Alternative Dispute
Resolution (ADR) as provided for in Article 159 (2)(c) of the
Constitution, noting that so far the move has raised Sh8.3 Billion from
181 companies.
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