Kenya: Court Stops Revenue Authority from Collecting Sh3.7billion Tax in Coca-Cola Deal

The Supreme Court of Kenya has stopped the Kenyan Revenue Authority from collecting the sum of Sh3.7 billion being excise duties on returnable bottles accrued to Centum Investment Company which sold its Coca-Cola bottling businesses.

The company sold 27.6% of its stake in Nairobi Bottlers and 53.9% at Almasi Beverages to Coca-Cola Beverages Africa in 2019. It has since been at loggerheads with the KRA as the authority demanded a fifth of the 19.3 billion shillings sale.

A 2004 amendment to the Customs and Excise Act removed the clause that dealt with the payable on returnable bottles, which the KRA interpreted as having the right to receive the excise duty of it.

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According to the Supreme Court, the matter was previously settled at the lower courts and as such, the constitutional review was not the fault of Centum, it cannot restart the case. “We note that the dispute commenced in the High Court in October 2012, 10 years ago, then moved to the Court of Appeal, over nine years ago in July 2013,” the court said in the ruling. “To start the case all over again, for no fault of the respondents, is not only unconscionable but also insensitive and cruel.”

The KRA initially sought Sh5.6 billion from the bottling company but as Centum did not fully own the business and ran a subsidiary of the The Coca-Cola Company in the United States, its exposure was limited to Sh.3.7 billion.

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The demand was to collect excise taxes on costs incurred during washing and sanitising returned bottles. In 2012, a High Court ruled in favour of the KRA to collect the taxes, a decision that was reversed when Centum went to the Court of Appeal.

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