Tribunal orders taxman to refund Tullow Sh488m

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Corporations

Wednesday August 11 2021

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By OTIATO GUGUYU

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Summary

  • The Kenya Earnings Authority (KRA) has been ordered to pay Tullow Kenya Sh488.2 million tax refund coming up from impolite oil exports under the Early Oil Pilot Plan (EOPS) in 2019.
  • KRA had thrown out the tax refund claim asserting Tullow outdated a imperfect format by submitting the claim manually as a replacement of using iTax and for making the claim out of time.

The Kenya Earnings Authority (KRA) has been ordered to pay Tullow Kenya Sh488.2 million tax refund coming up from impolite oil exports under the Early Oil Pilot Plan (EOPS) in 2019.

KRA had thrown out the tax refund claim asserting Tullow outdated a imperfect format by submitting the claim manually as a replacement of using iTax and for making the claim out of time.

The Tax tribunal on the opposite hand overturned KRA’s decision asserting on the time the submitting modified into made, there have been no specific necessities to file tax refunds online and that KRA had now not specified the accomplish of submitting the claim and allowed Tullow to ask for the refund.

“Barely frankly, it is unfair, irrational even, for the respondent to reject the appellant’s utility on the time it did and then over and above that lie to the taxpayer on the fitting accomplish for relief claims, when truly the accomplish prescribed by the regulations modified into now not in existence,” the Tribunal ruled.

In the main fragment of EOPS, the firm exported some 250,000 barrels at Sh1.48 billion however the second fragment modified into then bogged by execrable roads in Turkana that have been made impassable by flooding.

“KRA is hiding leisurely technicalities to frustrate Tullow’s claims contrary to the provisions of the structure…KRA is hereby directed to re-examine Tullow’s utility taking into narrative the relevant components in mild of lack of a prescribed accomplish described under Piece 18 (3) of the VAT Act 2013,” the Tribunal led by Mahat Somane talked about.

Tullow dispatched its first oil in August 2019 and declared its return as VAT zero rated sales.

The firm claims that earlier than the registration it had incurred VAT of Sh488.2 million and lodged the claim with KRA which permits such claims to be filed within three months.

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