The Kenya Revenue Authority (KRA) is set to collect taxes of Kshs. 27 million following a decision by the High Court on 22nd June, 2020 in an appeal filed by Tumaini Distributors Company Limited earlier this year against a decision of the Tax Appeals Tribunal rendered in 2019.
In September 2016, KRA conducted an examination into the affairs of Tumaini Distributors Company Limited and established that there was an under declaration of sales for VAT purposes. Having failed to provide evidence on account of VAT and expenses claimed in the income statement, KRA raised additional assessment of Kshs 27,080,973.08.
Aggrieved by the demand by KRA, Tumaini Distributors Company Limited appealed to the Tax Appeals Tribunal. Upon hearing the appeal, the Tax Appeals Tribunal affirmed KRA’s tax demand.
Subsequently, Tumaini Distributors Company Limited appealed to the High Court.
Arriving at his decision in which he concurred with the findings of the Tax Appeals Tribunal; Justice David Majanja held that Tumaini Distributors Company Limited had a duty to provide all the necessary documents. The Judge observed that KRA was entitled to rely on self-assessments and returns lodged by Tumaini Distributors Company Limited, in the absence of any other documents to raise its assessment.
The High Court further ruled that Tumaini Distributors Company Limited failed to discharge the burden of proving that KRA was wrong or that the Tax Appeals Tribunal reached a wrong decision, noting that its objection was filed out of time and that it had been rejected.
KRA is at liberty to collect the taxes after the thirty (30) days stay of execution lapses from the date of the judgment.
Commissioner-Legal Services & Board Coordination