Sunday October 13, 2024
A Hashi Energy fuel station in Meru, Kenya. CREDIT / Facebook
NAIROBI, Kenya (HOL) — Petroleum dealer Hashi Energy has failed to overturn a Sh7 billion ($54 million) tax claim by the Kenya Revenue Authority (KRA), deepening the company’s financial troubles as it faces liquidation.
The Tax Appeals Tribunal, chaired by Robert Mutuma, ruled that Hashi Energy did not provide sufficient evidence to challenge KRA’s tax assessment for the period between 2017 and 2022. The company had also failed to file its self-assessment tax returns for the years 2021 and 2022, a move that significantly weakened its case.
“In the circumstances, the Respondent cannot be faulted for using the available information and its best judgment as empowered under Sections 24 (2) and 31 (1) of the Tax Procedures Act,” the tribunal stated in its ruling, upholding KRA’s tax demand.
KRA initially demanded Sh7.1 billion ($55 million) from the petroleum company, which was later revised to Sh7.12 billion ($55.3 million) following a review of Hashi’s financial records. The audit covered several tax categories, including corporation tax, VAT, withholding tax, and Pay-As-You-Earn (PAYE). Hashi Energy disputed the assessment, arguing that delays in completing its financial audits led to inaccuracies in KRA’s figures, but the tribunal found this explanation insufficient.
The tribunal’s decision compounds the company’s financial struggles, with Hashi Energy now in voluntary administration and planning to sell off assets, including land, to pay its creditors. The tax burden adds to the company’s ongoing liquidation crisis, which has cast uncertainty over its future in Kenya’s energy sector.
With the tribunal’s decision final, Hashi Energy is left with few options to resolve its outstanding liabilities as it navigates liquidation and seeks to settle its debts.
