KRA Wins Share Of Ksh4.4bn Westgate Compensation

The Kenya Revenue Authority (KRA) has won a case that was in the courts to have it awarded a portion of the Ksh4.4 billion insurance payout to Westgate Mall. The insurance was paid out by Kenindia Insurance following a terrorist attack in 2013.

Sony Holdings Limited, the malls owners had moved to court seeking to stop the taxman from demanding Sh221 million in taxes from the terror attack compensation and Sh159 million in tax arrears for 2016.

The owners argued that the KRA had unfairly classified the compensation as revenue to justify the tax demand but the payout was indeed capital. The taxman, however, maintained that Sh600 million of the compensation should have been regarded as income and westgate should pay 30 pc corporation tax.

KRA was seeking a share of the Sh1.2 billion after deduction of operation expenses from Sh3.1 billion paid as compensation for damage to the mall and a further Sh1.2 billion as compensation for loss of rent during the period the shopping complex in Nairobi’s Westlands area remained closed.

High Court judge John Mativo quashed the application by Sony Holdings saying the owners had failed to prove among other allegations that KRA had acted in bad faith and that the tax claim was illegal. “I find and hold that the applicant has failed to present grounds to demonstrate that the impugned conduct of decision is legally frail,” said Justice Mativo.