2.4bn/- lawsuit for Fastjet?

Freckle-faced budget airline Fastjet could be sued for over 2.4bn/- (1.5 million US dollars) by Tanzania Revenue Authority (TRA) for failing to pay taxes for almost a year, UK daily The Telegraph reported Thursday.

The Tanzanian arm of the firm, which is listed at the London Stock Exchange, failed to pay payroll and property taxes, according to The Telegraph brief.

Sources told the UK paper that the company was found to owe the Tanzanian government billions in unpaid dues during a tax audit last month.

Local representatives of Fastjet say the burden is not theirs to pay off. They say the matter is a legacy issue inherited when the budget carrier took over local hauler Fly540 in June last year.

“[Fly540 chief executive] Don Smith has accumulated significant debt from Fly540, Fastjet has no liability for these,” says a Fastjest press note sent to The Citizen on Sunday.

Firm spokesperson Meg Muigai insists all money issues were settled during the buyout. Fastjet owes the Fly540 executive no other favours, she says in the statement.

“Mr Smith certified in a document signed by him on 24 July 2012 that other than specific liabilities as set in the document, there is no other liability or indebtedness due to him or any entity controlled by him.”

The Telegraph reported that Fastjet was also on the hook for missed airport departure charges accrued by its newly-bought asset between January and November last year.

These claims are the latest in an array of other demands and legal issues the embattled budget carrier is grappling with in East Africa.

The firm is embroiled in bitter disputes in Kenya and Uganda, according to British media.

In an earlier response, the UK paper quoted a Fastjet spokesperson who said the company “works closely with the Tanzanian government to properly address all historic issues relating to tax.”

Tax officials in Dar es Salaam have told The Citizen on Sunday they are unaware of any revenue backlog issues pertaining to the newly-launched no-frills carrier.

Senior Tanzania Revenue Authority (TRA) officer Lupinje Hamis said he was unaware of any tax issues, and could not comment on the Fastjet matter.

The firm shook the Tanzanian airline industry to the core with the introduction of ultra-cheap air travel in November last year.

It is positioning itself as a major contender in Africa, with an aggressive growth strategy that has seen it pursue partnerships and acquisition in West, Central and Southern Africa.
Source: The Citizen, www.thecitizen.co.tz, the Citizen Reporter and Agencies
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