The amount was paid in the three months to December 2019 and relates to taxes that became due in the full year ended June, 2019.
This has pushed up the Government’s earnings from the miner during this period to Sh3.57 billion, given that the State also earned Sh1.47 billion in royalties.
Australian mining firm Base Resources paid Sh2 billion ($20.7 million) corporate income tax to the Kenya Revenue Authority (KRA) after exhausting the tax deductions from its initial investment in the Kwale titanium project.
The amount was paid in the three months to December 2019 and relates to taxes that became due in the full year ended June, 2019.
This has pushed up the Government’s earnings from the miner during this period to Sh3.57 billion, given that the State also earned Sh1.47 billion in royalties. Base invested Sh31 billion ($310 million) to construct and equip the Kwale mine and build related infrastructure between 2012 and 2014, earning it the upfront tax deduction.
It has made additional capital expenditures since then.
“This large tax deduction created a significant tax loss position which has been carried forward and subsequently applied against profits generated by the operation,” the firm states in its trading update for the quarter ended December.
“Following the depletion of its remaining carry forward tax losses, Kwale Operations reached a tax payable position for the first time in the 2019 financial year.”
This saw it pay KRA Sh1.45 billion ($14.5 million) for financial year ending June 2019 and a further Sh622 million ($6.2 million) in settlement of its estimated corporate tax payable for the first two quarters of its current fiscal year.
Base explains that since becoming a taxpayer, it has transitioned from paying corporate income tax annually in arrears to quarterly in advance.
The Kwale operation recorded a 14.1 percent decline in sales in the quarter ended December to Sh4.5 billion amid reduced production and lower prices of the minerals in the international markets. Average prices of the commodities dropped 5.8 percent to $355 (Sh35,600) per tonne from $377 (Sh37,800) per tonne as production tumbled 18 percent to 119,687 tonnes. Volumes sold, however, registered a relatively lower decline of 9.6 percent to 127,328 tonnes as the company brought some of its old stocks to the market.
