Coca-Cola East and West Africa has successfully secured a 670 million Kenyan shillings ($4.1 million) refund from the Kenya Revenue Authority (KRA) following a ruling by the Tax Appeals Tribunal. Headquartered in Nairobi, Kenya, Coca-Cola East and West Africa, an affiliate of The Coca-Cola Company, primarily provides marketing and promotional services to its sister affiliate, The Coca-Cola Export Corporation (TCCEC), in the Kenyan market. The tribunal determined that the services rendered by the company, although operating locally, fall under zero-rated value-added tax (VAT), and KRA's objection decision and assessment of $3.1 million were not justified. The ruling allows Coca-Cola East and West Africa a VAT refund of $4.1 million emphasizing the export nature of its marketing and promotion services.
The firm, defending its position, highlighted its service agreement with TCCEC, covering marketing and promotion services in Kenya and various Central and East African countries. This strategic move by Coca-Cola East and West Africa aligns with its goal to bolster the image and sales of Coca-Cola brands, benefiting its foreign affiliates. In response to KRA's claims that the services were locally consumed, the tribunal emphasized the export nature of the services, classifying them as zero-rated, reinforcing the company's pursuit of regulatory compliance and financial rectitude.