Kenya’s government has launched a formal investigation into Huawei Technologies (Kenya) Ltd., focusing on a tax waiver amounting to Ksh1.92 billion ($12.57 million). The parliamentary members are currently conducting inquiries to understand how the Chinese corporation secured this significant tax relief from the National Treasury. This inquiry has led to some tensions between Kenyan Members of Parliament (MPs) and Huawei.
Huawei executives faced rigorous questioning from the Finance Committee during the probe. Molo MP Kuria Kimani, the chairman of the inquiry committee, notably sent back the director of the company for failing to provide satisfactory explanations.
As reported by The East African, the Finance Committee dismissed senior Huawei executives for their inability to clarify why the state waived millions of dollars in taxes payable to the Kenya Revenue Authority (KRA).
Kevin Wen, the multinational’s director, met with officials in charge of the inquiry into the tax issue. However, Kuria Kimani refused to grant him an audience due to the failure to produce a written response to the inquiry beforehand.
Responding to the dismissal, Mr. Wen emphasised a crucial distinction, stating, “The contract was between the ICT ministry and Huawei Technologies (China) Co Ltd and not Huawei Technologies (Kenya) Ltd. These are separate companies, and we are not a subsidiary.”
According to The East African’s report, the inquiry chairman revealed that a demand notice for negating tax income arrears from 2016 to 2019 was issued by the KRA in March 2023.
In line with the Income Tax Act, the ministry was obligated by the contract’s conditions to withhold tax (WHT) from payments made to Huawei Technologies (Kenya) Ltd. A total of Ksh1.953 billion in WHT, comprising Ksh1.43 billion in principal tax, Ksh71.3 million in penalties, and Ksh456.7 million in interest, was assessed and sought by the KRA from the ICT Ministry.
