Tullow Oil has challenged a tax assessment of about KSh23 billion issued by the Kenya Revenue Authority (KRA) over the sale of its Kenyan business.
The dispute stems from the company’s disposal of its entire shareholding in Tullow Kenya BV to Gulf Energy Group in a deal valued at a minimum of $120 million (KSh15.5 billion).
Tullow Oil said it had been notified of the tax demand, which relates to alleged underpayment of Value Added Tax (VAT) and Capital Gains Tax (CGT) arising from the transaction.
Tullow Oil in tax row with Kenya Revenue Authority over KSh23 billion exit deal. Photo: Courtesy.
According to the assessment, which follows an audit covering the period between 2020 and 2025, KRA is seeking KSh18.29 billion in VAT, KSh4.6 billion in Capital Gains Tax, and about KSh129.15 million in Withholding Tax.
Tullow Oil however strongly disagrees with the tax assessment and confirmed it will formally challenge it alongside Gulf Energy Group through the established objection process.
“The Group is aware of a tax assessment for $170 million (Ksh21.96 billion) from the Kenya Revenue Authority relating to alleged underpaid VAT and Capital Gains Tax on the disposal of its 100% shareholding in its Kenyan subsidiary, Tullow Kenya BV, to the Gulf Energy Group for a minimum consideration of $120 million (Ksh15.5 billion). The Group’s clear and firm position is that the assessment is wholly without merit, and it intends in conjunction with Gulf Energy to contest the assessment through the regular objection process,” the statement read.
The company maintained that the claim lacks merit and indicated that it will pursue all available legal channels to contest the assessment issued by the Kenya Revenue Authority.
Tullow further stated that it does not anticipate any immediate financial impact from lodging the objection or during the appeals process.
It added that no provision has been made for uncertain tax treatment related to the dispute, as the company does not expect any cash outflow arising from the objection or the eventual conclusion of the appeal.
