The Kenya Revenue Authority has gone after Car & General with a multi-million tax demand. The taxman is demanding up to Sh. 667 million. This is 76.3 percent of the diversified trading company’s net profit of Sh. 887.2 million in the year ended September 2021.
Apparently, KRA has alleged that this heavy tax accrued over six years ended 2020 and arises from the company’s three-wheeler or tuk-tuk business. “In particular, the KRA issued a customs tax assessment during the year of Sh. 677 million, excluding interest and penalties. This assessment is in respect of the company’s tariff classification for three wheelers for the years of income 2015 to 2020,” Car & General said in its report.
The firm protested against this tax demand and launched a case with the Tax Appeals Tribunal (TAT), taking issue with “specific matters of application and interpretation of tax legislation affecting the company and the industry in which it operates.” It won the case on October 15, 2021.
However, this did not stop the taxman from continuing with the tax demand. “KRA has appealed the TAT judgement on December 6, 2021. With the assistance of professional advice, the directors have considered all matters in contention and are confident that the TAT ruling will be upheld and no material liability will crystallise to the company,” Car & General said.
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The business posted impressive financials results for the year ended September 2021. Its financial results show that profit more than tripled to Sh. 887.2 million as revenue surged 41.4 percent to Sh. 17.1 billion. In addition, the business quadruple its dividend payout to Sh. 3.2 per share and also proposed a one-for-one bonus share.
This is not the first time that KRA is going after mainstream businesses. The taxman is currently rocked in a fierce battle with beer maker Keroche Industries over a tax demand that amounts to billions of shillings.