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The High Court in Nairobi has affirmed the decision by the Tax Appeal Tribunal that insurance disbursement of Sh600 million to Westgate Shopping Mall was not subject to tax.
Justice David Majanja last week dismissed an appeal by Kenya Revenue Authority against Sony Holdings Limited.
Sony Holdings is a company engaged in the business of developing, owning and letting real estate and its flagship project is the Westgate Shopping Mall from which it receives rental income.
The mall was on September 21, 2013 subjected to a terror attack that led to loss of lives and property, which greatly affected its operations. The company held a terrorism and political violence insurance cover for property damage and loss of rent receivable in the sum of Sh6 billion and Sh1.2 billion, respectively with Kenindia Assurance Company Limited.
Westgate Attack: KRA Blocked From Taxing Compensation Billions
People going about their day to day activities outside the Westgate Mall.
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The High court has rejected an appeal by the Kenya Revenue Authority (KRA) to collect a share of the billions paid to Westgate Mall owners as compensation following the 2013 terror attack.
Justice David Majanja affirmed the position by the Tax Appeals Tribunal stopping the taxman from claiming a share of Ksh4.4 Billion compensation paid to the mall by Kenindia Insurance.
KRA through the commissioner of taxes appealed the ruling as it sought Ksh380.3 million from the owners noting that a portion of the compensation (Ksh660 million) should have been classified as income.
KRA loses bid for piece of Sh4.4bn Westgate payout VICTOR JUMA The Kenya Revenue Authority (KRA) has lost a court battle for a share of the Sh4.4 billion compensation that the Westgate Shopping Mall received from Kenindia Insurance following a terrorist attack in 2013. Through the commissioner of domestic taxes, KRA wanted the court to overturn a decision of the Tax Appeals Tribunal that blocked it from demanding Sh380.3 million from the mall owners, Sony Holdings Ltd. High Court judge David Majanja dismissed the appeal saying the Commissioner failed to demonstrate any error in the Tribunal’s decision that would warrant intervention by the court. Westgate owners had argued that the taxman had unfairly classified the compensation as revenue instead of capital to justify the tax demand. However, KRA maintained that Sh600 million of the compensation should have been regarded as income and was therefore liable for payment of 30 per cent corporation tax as Westgate h
KRA loses bid for piece of Sh4.4bn Westgate payout
Wednesday May 05 2021
By JOSEPH WANGUI
Summary
Through the commissioner of domestic taxes, KRA wanted the court to overturn a decision of the Tax Appeals Tribunal that blocked it from demanding Sh380.3 million from the mall owners, Sony Holdings Ltd.
High Court judge David Majanja dismissed the appeal saying the Commissioner failed to demonstrate any error in the Tribunal’s decision that would warrant intervention by the court.
The Kenya Revenue Authority (KRA) has lost a court battle for a share of the Sh4.4 billion compensation that the Westgate Shopping Mall received from Kenindia Insurance following a terrorist attack in 2013.
THE STANDARD
BUSINESS NEWS
Kenya Revenue Authority (KRA) will not get a piece of the insurance compensation paid to the Westgate Shopping Mall owners.
The High Court on March 30 upheld a decision that the insurance payout could not be considered as income for taxation.
On September 21, 2013 masked gunmen stormed the mall in Nairobi, launching grenades and firing indiscriminately at panicked shoppers where a three-day siege with security forces ensued.
By the end of the siege, more than 70 people had died, dozens injured and significant damage caused to the mall and property around it.
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Sony Holdings Ltd, the developers and owners of Westgate Mall, held a terrorism and political violence insurance cover with Kenindia Assurance Company.