Coca-Cola has won a decade-long dispute with the Kenya Revenue Authority (KRA) after the Court of Appeal ruled in favour of the beverage company, a move that denies the tax authority about Sh5.6 billion ($54 million). This was reported by Business Daily Africa.
Three judges of the Appellate Court ruled that levying tax on returnable containers (bottles and crates) every time they are refilled would amount to multiple taxation which is, “needless to say, unconscionable and unlawful”.
“In our view, the exclusion of returnable containers from the ex-factory selling price as per the previous legislation must have appreciated the unique nature of the practice in the industry and the dealing in such containers,” said Justices Wanjiru Karanja, Otieno Odek and Kantai ole Sankale.
In the case, Mount Kenya Bottlers Ltd, Rift Valley Bottlers, Nairobi Bottlers and Kisii Bottlers moved to court in 2009 after the KRA demanded an outstanding aggregate sum of Sh5,620,730,161 on account of alleged arrears of excise duty, value-added tax and interests
This was after the KRA carried out various tax audits on the bottling firms for the period between 2006 and 2008.