A Nairobi-based Construction firm, Jipsy Civil & Building Contractors Limited, is to pay the Kenya Revenue Authority Ksh259,319,773 in Value Added Tax arrears. This is after Tax Appeal Tribunal dismissed an appeal that the company had filed to contest, among others, the liability for the VAT amount.
One of the issues for determination before the tribunal was the validity of the appeal itself. KRA’s case was that the company failed to claim input VAT within timeline of six months prescribed in the VAT Act. Further, the company had declared its returns but never paid the declared taxes either when objecting or when filing the appeal.
The law requires that before filing a tax appeal, a person should pay the admitted taxes. Jipsy Civil and Building Contractors Limited failed to give explanations on the issue of invalidity of its appeal having not paid the admitted taxes nor did it seek to validate the same at any point by making payment of the self-assessed taxes.
The Tribunal found that the appeal was invalid as the admitted taxes had not been paid nor had the firm presented a payment plan as required by the law. The appeal was dismissed and the assessment of Ksh259,319773.47 was upheld.