Bamburi Cement, a well-known East African cement company, has successfully settled nearly 60% of its $2 million in tax interest and penalties.
The resolution of the tax case marks a watershed moment for Bamburi Cement, resolving a long-standing assessment linked to transfer pricing. The Kenya Revenue Authority (KRA) agreed to waive $0.8 million in interest and penalties as part of the continuing tax amnesty scheme.
This achievement comes years after the cement manufacturer achieved an agreement with KRA under the Alternative Dispute Resolution framework for the assessment period from 2007 to 2011.
In that earlier agreement, Bamburi Cement agreed to pay the agreed-upon principal tax of $2.2 million for corporate tax, as well as an extra principal of $0.27 million for the years 2014 to 2021.
In a similar scenario, Bamburi Cement in Uganda saw a large drop in earnings during the first half of 2023, owing mostly to the resolution of corporate tax difficulties.
The company’s earnings were significantly impacted by a significant increase in taxes, which increased from $200,000 to $3.67 million, accounting for an astounding 86 percent of the company’s $4.27 million pre-tax profit.
This development in Uganda comes after Bamburi Cement received a tax demand of $6.58 million in 2022. The specific settlement amount is unknown; nonetheless, the company’s financial statement shows that the resolution of corporate tax concerns in Uganda had a negative impact on earnings after tax.