Australian Titanium Company Wants $27M In VAT From Kenya

By @chelean on
Titanium Ingot
IN PHOTO: An employee works with a titanium ingot at the VSMPO-Avisma factory in Verkhnyaya-Salda, some 1,800 km (1,100 miles) east of Moscow, November 7, 2013. Russia's VSMPO-Avisma, the world's biggest producer of titanium, expects profits to rise 25 percent to some $250 million this year due to robust demand from the aerospace industry, the firm's key customer. Picture taken November 7, 2013. REUTERS/Svetlana Burmistrova

Titanium is becoming quite the in-demand commodity, and as a result, titanium companies are starting to notice their worth in the global market, especially in the areas they are mining at. Australia-based mining firm Base Titanium Ltd. claimed that Kenya Revenue Authority (KRA) owed the company KSh2 billion [$26.6 million] in Value Added Tax and shares. This demand was due to the fact that they have contributed enough to Kenya’s economic growth.

Kenya Revenue Authority is the government body responsible for collecting customs, income and excise tax, as well as tax types and notices in Kenya, where Base Titanium’s Kwale County mineral project operates. In a statement, Base Titanium says that Kenya Revenue Authority has not yet settled the amount and that most of the refunds were acquired during the construction phase of the Kwale Mineral Sands Project.

“Base spent about Sh26 billion building the project which now produces minerals exclusively for the export market,” said Tim Carstens, Base Titanium’s Managing Director in a post by Standard Digital. “This means that under the VAT Act, these products are zero rated for VAT purposes.”

In a separate report, it is stated that Base Titanium is one of the companies that were responsible for the increased activity in Mombasa Port. The total cargo exchange at the port spiked by 11.5 percent from 22.3 million tonnes in 2013 to 24.9 million tonnes in 2014. Exports through the Mombasa Port increased by 12.8 percent to 3.4 million tonnes, a significant rise from the 2.8 million tonnes recorded in 2013. The exports coming from Base Titanium include Zircon, Rutile and Ilmenite.

“This was mainly on account of exports of titanium estimated at 363,009 tonnes,” said the Economic Survey 2015, as reported by Hellenic Shipping News. 

While Australia is further expanding its reach in the global titanium market through mines in Africa and in different parts of the globe, the Chilean titanium sector is also at its peak, especially with developing mines in the Atacama region. Developing firm White Mountain Titanium (OTCQB: WMTM) aims to produce 112 million tonnes of rutile from its Cerro Blanco deposit. Projects like White Mountain's reflect that the global titanium market will flourish in the years to come despite financial and tax-related issues such as that of Base Titanium.

 

Contact the writer: a.lu@ibtimes.com.au

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