a. Whether demurrage charges are part of freight or rent for use of
containers.

b. Whether the non-resident principal of the Appellant derived any income
from Kenya.

c. Whether the Appellant was Hable to withhold tax while remitting
demurrage.

The Appellant argued that Clause 5 (a) of the Agency Agreement states that
the agent shall at its risk and responsibility undertake the collection of all
freight including, if applicable, but not limited to demurrages, when due.
Further, Clause 6(a) of the said Agreement stated that the agent shall be
responsible for and pay in USD to EMS, without any deductions
whatsoever, all freights and other receivables in respect of each voyage.
5. In reference to the aforesaid Clauses, the Appellant argued that the
containers were the property of EMS and that demurrage was to be
remitted by the Appellant in the same manner as the freight.
6. The Appellant argued that withholding tax was assessed on the demurrages
accrued in favor of EMS on account of delay by its clients to release the
containers after the delivery of their cargo. It stated that this amount was
collected by it on behalf of its principal EMS. The Appellant attached a
demurrage invoice to snow that the payment order for demurrage incurred
by the importer was raised by the Appellant and the same was done purely
as an agent of EMS.
7. The Appellate stated that the demurrage did not fall within the ambit of
Section 3;5P~of the Income Tax Act as demurrage is a penalty imposed for
exceeding the free time allowed to' the importers to release the containers
and as such the demurrage was not a fee that was levied in every instance
but only where there had been delay.

The Tribunal in the circumstances makes a finding that the Appellant as the
agent is under an obligation to withhold tax of any payment made to a
non-resident person and to remit the same to the Respondent as the same
is chargeable to income tax, being the sum accrued in or was derived from
Kenya. The Respondent's confirmed assessment of WHT on demurrage is
accordingly upheld.
25. The upshot of the above is that the tribunal finds that the appeal herein
lacks merit and the same is dismissed with no order as to costs