ILLEGALITY?

Africa Reinsurance sues State over Sh12bn tax arrears

Says it enjoys immunity from taxation thus wrong for KRA to demand the money.

In Summary

• On September 12, 2018, the corporation was served with default assessment notice for the sum of Sh12 billion.

• Last month it received another notice requiring it to pay the money in question in 30 days.

Africa Reinsurance Corporation has sued government seeking to block the recovery of Sh12 billion in tax arrears.
Africa Reinsurance Corporation has sued government seeking to block the recovery of Sh12 billion in tax arrears.
Image: THE STAR

Africa Reinsurance Corporation has sued government seeking to block the recovery of Sh12 billion in tax arrears.

The corporation popularly known as Africa Re says it enjoys immunity from taxation and as such move by the chief tax collector to demand payment of the billions is wrong and shouldn't be allowed.

The corporation was set up by 36 African countries under the auspices of African Union in 1976 with the sole aim of developing insurance and reinsurance industry.

 

Kenya ratified the establishment agreement on February 22, 1977, which among other things exempted the corporation from payment of all direct taxes on its income.

However, on September 12, 2018, the corporation was served with default assessment notice for the sum of Sh12 billion.

The corporation resisted the move to audit its books.

It opted to write back indicating that it cannot honour the invite due to its diplomatic status Instead the corporation started a parallel effort to sort the issue through a diplomatic channel which was unsuccessful.

Last month it received another notice requiring it to pay the money in question in 30 days.

Aggrieved by the move it has now filed a case seeking a legal reprieve.