WCA November 2011

Industry news

Kenyan power firm stands fast on tax bill Access Kenya Group, Kenya’s Providing fibre backhaul support

corporate data and infrastructure provider, and Airtel Kenya have partnered to provide customers with fixed voice services over fibre optic cable. The two companies have signed a contract that grants Airtel access to Access Kenya’s extensive fibre network. The deal is to provide connectivity services for Airtel’s fixed line voice services, also known as E1. Airtel Kenya will now buy E1 circuits from Access Kenya’s fibre optic network. Access Kenya Group MD Jonathan Somen said Airtel is set to leverage Access Kenya’s extensive fibre presence to reach more customers, more buildings and to provide reliable services on Access Kenya’s network. Access Kenya Group – Kenya Fax : +254 203 600 01 Email : info@accesskenya.com Website : www.accesskenya.com

correct,” finance assistant minister Oburu Oginga told Parliament. “We have already started discussions on the matter with KRA on the possibility of exempting REA from paying taxes. “This would most likely necessitate an amendment to the Energy Bill,” added Mr Oginga. Electricity consumers pay a five per cent rural electrification levy in their monthly power consumption bills that is passed on to REA to accelerate the pace of electricity penetration in rural Kenya. Settlement of the tax arrears looks set to slow down rural electrification projects, which have helped boost the country’s electricity penetration rates from 12 per cent of the population in 2005 to about 30 per cent last year. Rural Electrical Authority – Kenya Fax : +254 020 495 3600 Email : info@rea.co.ke Website : www.rea.co.ke

Kenyan Business Daily reports that Kenya Revenue Authority (KRA) and the Rural Electrification Authority (REA) are locked in a Sh1.85 billion tax arrears battle, the outcome of which could slow down the connection of more Kenyans to the national electricity grid. The power agency, through Treasury, is pushing for the tax authority to waive its tax backlog on the grounds that its operations are not profit driven and that it does not sell commodities. It also argues that it was not aware of its tax obligations. KRA is insisting that the agency is not exempted from paying taxes and that it should clear the backlog accumulated since 2006, when the former department in the Ministry of Energy was upgraded to an autonomous corporate body. “REA had assumed that they are not supposed to pay tax, which is not