Blow to fuel brokerage firm, Tropical Oil Movers after losing Sh118million tax suit to KRA
The Kenya Revenue Authority(KRA) has rejected a petroleum trading company’s plea for a reconsideration of Sh117.94 million tax claim.
According to High Court Judge David Majanja, Tropical Oil failed to file returns and pay overdue levies as required by the Commissioner of Domestic Taxes.
Tropical Oil and KRA’s feud began in September 2018, when the taxman demanded overdue taxes dating back to 2016.
The oil company was told that if it did not submit all pending returns and pay all taxes owed within seven days, KRA would issue default assessments.
However, Tropical Oil did not comply, causing KRA to continue and assess Sh59,566,842.32 and Sh58,373,669.85 for the fiscal years 2016 and 2017, respectively, on October 29, 2018.
In November 2019, the oil company opposed the proposed tax, claiming that its gross margins were less than Sh2 per litre and so the turnover could not attract such high taxes, which had been set at 80 per cent.
It further claimed that it had low company sales in August 2016 and VAT and PAYE taxes were made inactive on October 7, 2016, and July 7, 2016, respectively.
The appellant also sent copies of its 2016-2017 and 2018 returns, as well as PAYE and VAT PIN certificates.
KRA only received the bank statements after which it issued an objection ruling on December 2019.
Tropical Oil filed an appeal with the TAT after being dissatisfied with the KRA’s ruling.
The panel ruled there was failure to file its returns on time.
