Titanium company seeks Sh2 billion in VAT refunds BY JACKSON...

Titanium company seeks Sh2 billion in VAT refunds
BY JACKSON OKOTH
Updated Monday, May 4th 2015 at 00:00 GMT

Australian-based Mining firm Base Titanium Ltd says it is owed Sh2 billion in Value Added Tax ( VAT) by Kenya Revenue Authority. According to a statement from the company which operates a mineral project in Kwale County, the amount is yet to be settled by the taxman.

The firm says most of the refunds were accumulated during the construction phase of the Kwale Mineral Sands Project. “Base spent about Sh26 billion building the project which now produces minerals exclusively for the export market,” said the firm’s Managing Director Tim Carstens in a statement. “This means that under the VAT Act, these products are zero rated for VAT purposes. Base is therefore only seeking a refund of the VAT it has already remitted to the Government of Kenya and which it is has a legal right to claim.” Base said a proportion of the VAT being claimed was accrued in the construction of infrastructure necessary for the project’s development.

The mining firm says it spent Sh5 billion building a dam and water storage facility, a mine access road, a power line and substation - whose ownership has subsequently been transferred to Kenya Power, as well as a port and ship loading facility. This infrastructure is expected to continue having an important economic impact in Kenya and Kwale long after mining operations have ceased.

Since beginning operations in Kenya, Base Titanium said it has paid Sh225.67 million in royalties to the Government via the Ministry of Mining. This makes the firm one of the largest contributors to the Government revenue from the mining sector. “Without the significant capital investment, at which point the VAT refund claim was accrued, Base would not be in a position to make a meaningful and significant contribution to the Kenyan economy,” said Carstens. In the 2014-15 financial year, Base Titanium expects to remit over Sh1.3 billion as total direct tax contribution to the Government and close to Sh23 billion during the mining period.

Read more at: http://www.standardmedia.co.ke/busi...nium-company-seeks-sh2-billion-in-vat-refunds