Base Titanium has been ordered to pay Kenya Revenue Authority (KRA) 23.3 million shillings as withholding tax for the year 2021. The company, which has shut down operations in Kenya, has been ordered to pay the said taxes before exiting the country.
The order was given by the Tax Tribunal, upholding the decision by the Commissioner of Domestic Taxes (CDT) to charge the mining company that has been operational in Kenya for years. The Tribunal said KRA was justified to demand 20 percent withholding tax from the payments made to Wogen Pacific, a subsidiary of Base Titanium.
Kenya Revenue Authority has accused Base Titanium of paying withholding tax on the transaction made at 5.625 percent instead of the 20 percent that is application on payments to non-resident persons. The demand of the said taxes forced Base Titanium to rush to the Tax Tribunal to complain.
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Base Titanium accused Commissioner of Domestic Taxes of “unlawfully adjusting the withholding tax rate applicable to specific transactions declared under the Voluntary Tax Disclosure Program from 12.5 percent to 20 percent.” Base Titanium wanted that directive quashed.
The company said the actions by KRA were violating the sanctity of tax procedures by coming back for a second peak on issues that had already been closed. Base Titanium said KRA erred in law by demanding withholding tax in respect of the payment made to Wogen Pacific at the rate of 20 percent contrary to the provisions of paragraph 15 of the 9th Schedule to the Income Tax Act.
The ruling comes at a time Kenya Revenue Authority has intensified fights against tax evasion as well as encouraging businesses to reach out and discuss on how to pay their pending taxes without jeopardizing their businesses. The authority has also extended the tax amnesty program to June this year.
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