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Kenya’s government butt heads with Chinese Huawei over a $12m tax issue

Kenya's government has initiated an investigation into the Chinese corporation Huawei Technologies (Kenya) Ltd over a tax waiver case. The country’s parliamentary members are currently making inquiries into how the Chinese company managed to get a Ksh1.92 billion ($12.57 million) tax waiver from the National Treasury. This has resulted in some mild hostilities between Kenyan MPs and Huawei.

Kenya’s government butt heads with Chinese Huawei over a $12m tax issue - MP Kuria Kimani
  • Kenya launches investigation into Huawei's $12.57 million tax waiver. 
  • Huawei executives face tough questions from Finance Committee amid probe. 
  • The chairman of the inquiry committee Molo MP Kuria Kimani, sent back the director of the company. 

Kenya’s Finance Committee as reported by The East African, an East African news publication, sent away senior Huawei executives, for failing to explain why the state waived millions of dollars in taxes payable to the Kenya Revenue Authority (KRA).

The director of the multinational Kevin Wen met with the officials in charge of the inquiry into the tax debacle in which ex-Kenyan President Uhuru Kenyatta's regime provided Ksh620 billion ($4 billion) in tax breaks to local and global corporations.

The chairman of the inquiry committee Molo MP Kuria Kimani, refused to grant the Huawei director an audience owing to his failure to produce a written response to the inquiry prior.

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Responding to that, Mr.Wen noted, “The contract was between the ICT ministry and Huawei Technologies (China) Co Ltd and not Huawei Technologies (Kenya) Ltd. These are separate companies, and we are not a subsidiary.”

According to The East African’s report, the inquiry chairman stated that a demand notice for negating tax income arrears during the period spanning 2016 to 2019 was issued by KRA in March 2023.

In accordance with the Income Tax Act, he added, the ministry was obligated by the conditions of the contract to withhold tax (WHT) from payments made to Huawei Technologies (Kenya) Ltd.

A total of Ksh1.953 billion in WHT, consisting of Ksh1.43 billion in principle tax, Ksh71.3 million in penalties, and Ksh456.7 million in interest, was assessed and sought by the KRA from the ICT Ministry.

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British printer De La Rue, Kenya Breweries Ltd (KBL), and Moja Expressway are some of the companies that benefitted from the waivers. Additionally, the Treasury waived a levy of Ksh1.9 billion ($12.5 million) that Huawei owes the ICT ministry for installing fiber optic lines.

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