Hospital linked to Kakamega tycoon gets stay in tax dispute

Companies

Hospital linked to Kakamega tycoon gets stay in tax dispute


Cabinet Secretary of Health Mutahi Kagwe. PHOTO | FRANCIS NDERITU | NMG

BDgeneric_logo

Summary

  • Health Secretary Mutahi Kagwe successfully asked his Treasury counterpart Ukur Yatani to exempt Hamptons Hospital from paying value-added tax on the shipment whose value the owners say is $ 185.33 million.
  • Some of the equipment owned by the IRS includes that used for radiography and radiation therapy for cancer patients as well as various cardiology and laboratory equipment.
  • Last September, the Nairobi High Court also barred KRA from auctioning solar power plant machines and related equipment for non-payment of taxes by the Hamptons pending a decision.

A Kakamega-based hospital associated with magnate Julius Mwale has been granted a stay in a dispute with the Kenya Revenue Authority after the Treasury offered tax relief on multibillion shillings of medical equipment and machinery.

Health Secretary Mutahi Kagwe successfully asked his Treasury counterpart Ukur Yatani to exempt Hamptons Hospital from paying value-added tax on the shipment whose value the owners say is 185.33 million dollars (approximately 20.9 billion shillings) in 18 containers.

Some of the equipment owned by the IRS includes that used for radiography and radiation therapy for cancer patients as well as various cardiology and laboratory equipment.

Last September, the Nairobi High Court also barred KRA from auctioning solar power plant machines and related equipment for non-payment of taxes by the Hamptons pending a decision.

The hospital, based at Mwale Medical and Technology City in Kakamega County, is associated with Mr. Mwale.

“The Cabinet Secretary, National Treasury and Planning approved on December 8, 2021 the rebate of VAT on goods and services purchased locally / imported by Hamptons hospital Ltd for the construction of the Hamptons Specialty Hospital,” Mr. Yatani in a letter dated December 14 in response. at the request of Mr. Kagwe on December 4.

“The project under development on the LR / No. Marama / Lunza / 3313 along Hamptons Hospital Road, Butere, started on June 21, 2019 and is scheduled to end on October 23, 2023.

The exemption is expected to end a prolonged legal fight between hospital owners and the KRA over the exemption of equipment and machinery, mainly for the treatment of cancer, from 16% VAT.

The owners of the hospital had taken legal action to stop the auction of the equipment, arguing that the law exempts the company from paying VAT on goods and services related to the provision of health care as a “Recognized medical provider”.

In September, High Court Judge Jairus Ngaah banned KRA from auctioning the equipment until the case was decided.

The tax authorities had told the court that the law forbade them to charge VAT only on the issuance of an exemption certificate by the Secretary of the Treasury.

Lawyers representing KRA and Hamptons are now required to file a consent in court confirming the release of the hospital equipment. The court has scheduled a mention on January 26 next year.

[email protected]

About Natalee Broderick

Natalee Broderick

Check Also

Trends and tax purposes in 2022

The new year aoffstarted here, and it would be prudent to start the year off …