Automated Summary
Key Facts
Zain Connections Limited (Appellant) appealed against the Kenya Revenue Authority's (Respondent) disallowance of input VAT, underdeclared sales via banking analysis, disallowed expenses, and PAYE charges for 2022-2024. The Appellant failed to submit required documentation (purchase invoices, supplier confirmations, bank reconciliations) to support its objection. The Tax Appeals Tribunal dismissed the appeal on 19 September 2025, upholding the Respondent's decision due to the Appellant's failure to discharge the burden of proof under Sections 56(1) of the Tax Procedures Act and Section 30 of the Tax Appeals Tribunal Act.
Tax Type
Corporation Tax, Value Added Tax (VAT), and Pay As You Earn (PAYE)
Issues
- The Tribunal assessed whether the Respondent correctly disallowed input VAT for October 2022 and September 2023 under Section 17 of the VAT Act. The Appellant claimed the purchases were genuine but failed to provide required documentation and supplier confirmations, leading to the Respondent's decision being upheld.
- The Tribunal assessed if the Respondent's PAYE assessment on June 2024 expenses was valid. The Appellant argued the payments were business-related, but provided no evidence to support this, leading to the Respondent's decision being upheld as justified.
- The Tribunal determined if the Respondent's disallowance of 2023 expenses was lawful. The Appellant failed to submit source documents or proof of incurred expenses, resulting in the Respondent's decision being upheld as compliant with the Income Tax Act.
- The Tribunal evaluated if the Respondent's Corporation Tax assessment for 2022, based on banking analysis variances, was justified. The Appellant provided no documentation to support its claims that deposits were non-revenue, leading to the assessment's upholding.
- The Tribunal reviewed the Respondent's banking analysis to determine if the Appellant's underdeclared sales for December 2022 and June 2024 were correctly identified and taxed. The Appellant argued not all deposits were revenue, but failed to reconcile variances or provide evidence to contradict the analysis.
Tax Years
- 2024
- 2023
- 2022
Holdings
- The Appeal was dismissed for failure to discharge the burden of proof across all grounds, and the Objection decision was upheld.
- The Tribunal concluded that the Appellant failed to provide evidence for disallowed expenses in 2023, sustaining the Corporation tax assessment.
- The Tribunal determined that the Appellant did not present documentation to reconcile variances in banking analysis for December 2022 and June 2024, supporting the Respondent's assessment of underdeclared sales.
- The Tribunal found insufficient evidence that KPLC and fuel expenses were business-related, affirming the PAYE assessment for June 2024.
- The Tribunal found that the Appellant failed to prove compliance with Section 17(2) of the VAT Act regarding the deduction of disallowed input VAT for October 2022 and September 2023, thus justifying the Respondent's decision.
Remedies
- The Tribunal ordered that each party shall bear their own costs associated with the proceedings.
- The Tribunal found that the Appellant failed to discharge its burden of proof and accordingly dismissed the Appeal.
- The Tribunal upheld the Respondent's Objection decision dated 6th February 2025, which confirmed the assessments against the Appellant.
Tax Issue Category
- Withholding-Tax Characterisation
- Deductibility / Allowances
- Input Vs. Output Vat
Legal Principles
The Tribunal held that the Appellant failed to discharge its burden of proof under Section 56(1) of the Tax Procedures Act and Section 30 of the Tax Appeals Tribunal Act. These provisions require taxpayers to demonstrate that an assessment is incorrect or excessive. The Appellant did not provide sufficient documentation to support its objections, leading the Respondent to confirm the assessments as justified.
Precedent Name
- Bemarc Limited v Commissioner of Domestic Taxes
- Atronix Limited v Commissioner Domestic Taxes
- Boleyen International Ltd Vs Commissioner of Investigations and Enforcement
- Robert Ayisi v Kenya Revenue Authority and Another
- CMC Aviation Ltd V Cruisair Ltd
Cited Statute
- Tax Procedures Act, 2015
- VAT Act, 2013
- Income Tax Act
- Tax Appeals Tribunal Act
- Kenya Revenue Authority Act, Cap 469 Laws of Kenya
Judge Name
- Jimmy M. Malla
- Eunice N. Ng'ang'a
- Robert M. Mutuma
- Gloria A. Ogaga
Passage Text
- Pleadings contain the averments of the parties concerned... Until their truth has been established or otherwise, they remain un-proven. Averments in no way satisfy... the definition of 'evidence'.
- The Tribunal finds that the Appeal is not merited. The Tribunal accordingly proceeds to issue the following Orders: a) The Appeal be and is hereby dismissed.
- The Appellant failed to present any documents to support its contentions against the assessments.