This archive report was first published on 14 July 2021.
Kenya Power, the country's electricity distributor, is embroiled in a tax dispute over transformers shipped to the country seven years ago.
According to the Kenya Revenue Authority (KRA), Kenya Power has 30 days to pay duty and storage fees for the transformers, which were imported under a 'Delivery At Place (DAP) incoterms' agreement.
However, Kenya Power has shifted the blame to its suppliers, arguing that they are responsible for paying all taxes, duties, and levies, as well as delivering the transformers to the company's stores.
Kenya Power cited the 'Delivered Duty Paid (DPP) incoterms' agreement, which it claims applies to local manufacturers, where the supplier's responsibilities include payment of all taxes, duties, and levies, and delivery to KPLC stores.
The dispute comes at a time when Kenya Power is grappling with an ageing transmission network that has been blamed for power outages amid increasing system losses.
The KRA is aggressively pursuing uncollected taxes and cracking down on wealthy tax evaders as part of its budget for the year starting July.
