In a double blow to the Kenya Revenue Authority (KRA), the Tax Appeals Tribunal ruled in favor of two companies—Dalberg Research Limited and Panari Centre Limited—overturning multi million-shilling tax assessments over delayed responses by the revenue collector.
- •Both cases were centered on tax credits claimed by the companies—which KRA later disallowed, issuing additional assessments.
- •Dalberg faced demands totaling Ksh 13.2 million for 2015 and 2017, while Panari was hit with a KSh 33 million tax bill for 2015.
- •The firms filed objections challenging the assessments and argued that they had valid tax credits from overpayments and withholding taxes—but KRA took nearly three years to issue its decisions, far exceeding the legal timeframe.
“The Respondent did not demonstrate why it issued its objection decision on 3rd May 2024, over two years from the date of invalidation of the objection,” the court stated in the Dalberg appeal.
In both instances, the Tribunal concluded that the delayed responses invalidated the tax assessments, as the law mandates KRA to respond to such objections within 60 days. This outcome marks a significant precedent, reinforcing the statutory timelines meant to protect taxpayers from prolonged uncertainty.
The rulings also shed light on issues with KRA’s i-Tax system, the online platform used for filing and processing tax returns. Dalberg argued that i-Tax lacked proper fields to declare valid tax credits, forcing it to use a section intended for special credits under double taxation agreements. This misclassification, compounded by delayed responses from KRA, left Dalberg unable to secure refunds or resolve disputed assessments.
Panari faced similar difficulties with i-Tax, as its tax credits for overpayments were filed under a category meant for special agreements. KRA rejected these claims, arguing they were misfiled, yet the Tribunal found the tax authority’s response both untimely and inadequate.
