MultiChoice Africa faces setback in Sh681 million tax dispute
The tax appeals tribunal, chaired by Christine Muga, concluded that KRA was justified in disallowing MultiChoice's input tax claims despite compliance with filing through its Kenyan representative, MultiChoice Kenya Ltd.
MultiChoice Africa Holdings, the owner of DStv, has been dealt a significant blow after a tribunal upheld a Kenya Revenue Authority (KRA) decision to demand Sh681 million in taxes.
The tribunal ruled against MultiChoice, affirming KRA's stance on rejecting VAT input claims, resulting in the substantial tax bill encompassing penalties and interest.
The tax appeals tribunal, chaired by Christine Muga, concluded that KRA was justified in disallowing MultiChoice's input tax claims despite compliance with filing through its Kenyan representative, MultiChoice Kenya Ltd.
MultiChoice Africa Holdings, known for providing electronic audio and video entertainment services through DStv and Showmax, argued its compliance with Kenyan VAT laws and eligibility for input tax claims.
The dispute originated from a system limitation regarding non-resident transactions, prompting KRA to issue a significant VAT assessment covering January 2021 to June 2023.
Following unsuccessful objections, MultiChoice escalated the matter to the tribunal, asserting incorrect application of VAT regulations and distinguishing between its broadcasting and OTT streaming services' tax treatments.
The tribunal's decision underscores ongoing challenges in tax compliance for multinational digital service providers operating in Kenya, highlighting complexities in VAT regulations for cross-border digital services.
