KRA loses case against Coca Cola in Ksh.3.7 billion tax batle
The Supreme Court has thrown out Kenya Revenue Authority’s (KRA) Khs.5.6 billion case against the Coca-Cola company.
The Supreme Court bench comprising Chief Justice Martha Koome, her deputy Philomena Mwilu, Justices Mohamed Ibrahim, Njoki Ndung’u, and William Ouko threw out KRA’s application for failing to observe the court’s directions.
According to the judges, KRA’s application was not clear on its demands and had not attached essential parts of the petition filed in the High Court. They were of the view that it would be unfair to restart the case as it had been in the corridors of justice for 10 years.
“The dispute commenced in the High Court in October 2012, some 10 years ago, then moved to the Court of Appeal, over nine years ago in July 2013. To start the case all over again, for no fault of the respondents, is not only unconscionable but also insensitive and cruel,” the judges observed.
The case centeres around a Ksh. 5.6 billion tax demand by the taxman who claimed that Coca-Cola had not paid its excise duty between 2006 and 2008 on returnable crates and empty soda bottles.
Coca Cola had lost its case in the High Court after the lower court found that the taxman was within the law to demand the contested amount.
In 2019, centum investment sold its 27.6 percent stake in Nairobi bottlers and 53.9 percent interest in Almasi beverages, the owner of Mount Kenya bottlers, Kisii bottlers and rift valley bottlers to Coca-Cola beverages Africa for Ksh.19.3 billion.
It also disposed of its 100 percent interest in King Beverage Limited to Danish Brewing Company EA Limited, a subsidiary of Bounty Global Management DWC LLC on August 19, 2019, receiving Sh147.5 million in the deal.
Centum received an aggregate of Sh19.5 billion from the three transactions and used the cash to pay back part of its loans and increase its investment in bonds.
“The directors’ assessment is that the matter will be resolved with minimal impact to the business of disposed bottling companies and consequently the likelihood of the liabilities crystallising is remote,” the company said of the potential tax liability.
The High Court in 2012 allowed the KRA to collect the taxes, a decision that was overturned in July last year by the Court of Appeal. The taxman subsequently appealed the ruling at the Supreme Court of Kenya