Oil Dealers Demand Sh95m Tax Refund

By Godfrey Tung'wet Posted 20 July 2006 @ 06:42 pm EET     Print     Reprint     E-Mail     Comments

NAIROBI (IBTimes.com) - Oil companies are demanding more than Sh95 million in refunds for duty paid upfront for products exported to Uganda and other countries.

Shell, Total, Kobil, Chevron and Mobil, among other firms, said the delay by the Kenya Revenue Authority was costing them distress.

Their chief executives said the total lubricants claims from August to December, last year, stood at Sh47 million, and that the amount for January to June 2006 was estimated at Sh48 million.

They said in a letter dated July 7 that KRA had not remitted the money although the claims had been submitted since the new customs process came into effect in August, last year. The letter was addressed to customs commissioner Wambui Namu.

"Lubricants export claims have continuously been lodged, but they have been returned for further reprocessing and, in fact, no claim has been honoured," said the letter.

The firms said marketers were required to send to the customs commissioner documents showing the applicants and the recipients.

The chief executives said it was noted during a meeting KRA had with the firms on June 22 that lubricants export claims had not received enough attention.

They said there was need for the two parties to develop better relations over the refunds for the blending firms to remain afloat.

Oil companies recently urged the Government to make sure KRA started paying interest on tax refunds outstanding for more than a month.

They argued that they were incurring heavy losses as KRA did not pay any interest on the refunds on exports and duty-free sales to embassies, the Department of Defence and the Export Processing Zones.

"If the refunds are not released immediately for tax offsets, the alternative would be for the Government to pay interest on any monies owed by KRA beyond 30 days," they said.

The dealers called for a way to be found to offset refunds against taxes due, arguing that KRA had an effective way of tracking fuel volumes and payments through an electronic system.

"The oil industry's offsetting of refunds against taxes due to KRA will make exports to the neighbouring countries more efficient and reduce the undue financing burden to the exporters," they said.