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Saturday, July 22, 2017

Mining firm in Sh1.96bn refund claim from KRA

Base Titanium offices in Likoni, Mombasa on August 15,2016 / JOHN CHESOLI
Base Titanium offices in Likoni, Mombasa on August 15,2016 / JOHN CHESOLI

Australian-owned Base Titanium is claiming $19 million (about Sh1.96 billion) Value Added Tax refund from the Kenya Revenue Authority in relation to the construction of its Kwale plant.

The company says it spent about Sh26 billion on building the plant for production of titanium minerals – Illmenite, Rutile and Zircon – for export.

The project includes a Sh5 billion dam and water storage facility, a mine access road, a Sh2.5 billion port and ship loading facility at Likoni, and a power line and sub-station whose ownership has been transferred to Kenya Power.

Base Resources Ltd, in its quarterly activities report for March 2017, said the refund claims covers the period it started mineral production in October 2013 through March 31.

“These claims are proceeding through the Kenya Revenue Authority process, with operational period claims, totaling approximately $0.3 million (about Sh31 million), settled during the quarter,” the company says in the report signed by managing director Tim Carstens and executive director Colin Bwye.

Companies have in the past blamed the KRA for delays in processing VAT refunds, hitting their cash supply hard.

The taxman has, on the other hand, blamed the firms for filing false claims.

VAT refunds backlog was estimated at Sh30 billion mid last year.

Treasury PS Kamau Thugge last month, however, said all the tax refunds owed to manufacturers had been cleared, a week before the 2017-18 budget was presented to the National Assembly on March 30.

“We have finished with the issue of VAT refunds,” Thugge had said during a pre-budget media briefing in Nairobi on March 23.

In May 2015, Base Titanium locked horns with the government over royalties and tax refund after former Mining CS Najib Balala (now Tourism CS) dismissed a claim of Sh2.5 billion by the London Stock Exchange’s listed company.

Balala had accused the company of claiming more than it deserved.

“Base Resources is continuing to engage with the Kenyan Treasury and the Kenya Revenue Authority, seeking to expedite the remainder of the refund,” the firm says in its quarterly report.

The company has a net debt of $122.5 million (about Sh12.67 billion),owed to its lenders for the Kwale mineral sand project, completed in 2013. It targets to mine between 450,000 to 480,000 tonnes of Ilmenite this year.

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