An international company with business interest in the transport sector has been ordered to pay the Kenya Revenue Authority (KRA) taxes amounting to Ksh189,027,638.
In a judgment delivered on February 4, 2022, the Tax Appeals Tribunal (TAT) ordered Brick and Mortar Holdings Limited to pay the taxes after it failed to demonstrate gaps through the production of required evidence in KRA’s assessment of its tax obligations.
The taxes in demand by KRA comprise Corporation Tax, PAYE and VAT. The company, in its appeal, had alleged that KRA had failed to communicate its decision within the stipulated timelines, thus rendering its objection allowed by operation of the law.
The Tribunal held that before the company could fault KRA’s decision based on tax assessment, it was incumbent upon it to demonstrate that it had complied with the stipulated timelines and provided the required documents that would enable KRA to consider and make a decision, something it had failed to do.
The Tribunal held that KRA vigorously and professionally engaged the company to reach an amicable solution on taxes demanded but the company failed to submit a valid objection to the tax assessment by KRA accompanied by documents which KRA would have relied on to arrive at a decision.
The documents that ought to have been submitted by the company include the bank statements, signed audited accounts, sales and purchases ledgers. In the circumstances, the Tribunal held that it was not persuaded by the arguments advanced and rendered a decision in favour of KRA.