- The parties held consultative meetings on 14th December 2020 and 15th January 2021, they however failed to reach an agreement. KRA later reviewed its earlier demand and made another demand of Ksh. 46,428,080 through a letter dated 14th January, 2022. KRA issued a letter titled “Re: Demand Notice of Kshs. 46,428,080.00” which was said to be about Zuku’s application for review dated 11th February 2021
- In a ruling made on 17th May 2023 by the tribunal’s chairman Eric Wafula, he noted “Having found that the Appellant did not discharge the burden of proving that the imported items were refurbished, the Tribunal finds that the Respondent did not err in law and in fact in uplifting the prices of the modems and STBS imported by the Appellant”
By The Weekly Vision
Wananchi Group Kenya Ltd has been caught flat-footed by the Kenya Revenue in a Ksh. 60m tax evasion racket following years of investigations. Wananchi Group is Kenya’s second largest provider of digital pay TV, broadband internet, and voice-over-IP services by data/internet subscription numbers. It provides services under the brand name Zuku for retail clients and Simbanet for corporations.
The KRA had issued Zuku with a letter indicating its intention to conduct a Post Clearance Audit (PCA) on its imports and exports. Upon completion of investigations; KRA issued a demand for the payment of Ksh. 60,945,649. Aggrieved by the demand from KRA, Zuku applied for review with the Tax Tribunal.
The parties held consultative meetings on 14th December 2020 and 15th January 2021, they however failed to reach an agreement. KRA later reviewed its earlier demand and made another demand of Ksh. 46,428,080 through a letter dated 14th January, 2022. KRA issued a letter titled “Re: Demand Notice of Kshs. 46,428,080.00” which was said to be about Zuku’s application for review dated 11th February 2021.
Zuku had pleaded that the tax claim was from refurbished imported goods. It was therefore the court’s duty to determine whether Zuku provided sufficient evidence to demonstrate that the goods imported were refurbished. Zuku claimed that to reduce costs to its customers, it decided to import refurbished rather than new items. This shift from new to refurbished items was however not supported by the documentation filed at the Tribunal.KRA on the other hand found out that Zuku could not demonstrate that the items imported were refurbished.
In a ruling made on 17th May 2023 by the tribunal’s chairman Eric Wafula, he noted “Having found that the Appellant did not discharge the burden of proving that the imported items were refurbished, the Tribunal finds that the Respondent did not err in law and in fact in uplifting the prices of the modems and STBS imported by the Appellant”.
The ruling further reads “The upshot of the foregoing analysis is that the Appeal is not merited and the Tribunal accordingly proceeds to make the following Orders: The Appeal be and is hereby dismissed and the Respondent’s objection decision dated 14th January, 2022 be and is hereby upheld”.
