Thika road-based money printing company De la Rue has been ordered by a Nairobi High Court to pay Kenya Revenue Authority (KRA) Ksh. 1,106,043,698 in taxes.
De La Rue Currency and Security Print Company had filed an appeal to challenge a previous ruling by Tax Appeals Tribunal that ordered the company to pay the taxes due.
The tribunal had on June 4, 2021, ruled that the company which is registered and earns income in the country, had signed a contract with the Central Bank of Kenya (CBK) to print currency and could not offset royalties paid to its parent company De La Rue International as an allowable expense under Section 15(1) of the Income Tax Act.
The company had disputed that it paid royalties to De La Rue International for services rendered to it and therefore no taxes were due on its income.
The taxman told the court that the company had entered into a contract with CBK and it bore significant risk in the contract.
KRA explained that there were no Intellectual Property Rights arising to warrant payment of royalties.
The High Court however revoked the ruling by the tribunal on the basis that the appeal was lacking in merit and there was no evidence to persuade it to overturn the tribunal’s judgment.
