This archive report was first published on 25 August 2020.
On August 25, 2020, the Tax Appeals Tribunal delivered a significant ruling in favor of the Kenya Revenue Authority (KRA), ordering a Nairobi-based electronics dealer, Digital Box Ltd, to pay Sh700 million in undeclared tax.
The company, which deals in buying and selling of electronics on Luthuli Avenue, had disputed KRA's assessment, claiming that the taxman had failed to consider the costs of purchases for the years 2014, 2015, and 2016 in its computation.
However, the four-member tribunal, chaired by Catherine Mutava, ruled that Digital Box failed to discharge its burden of proof in showing that KRA used extraneous considerations and documents other than those prescribed by the law.
According to the tribunal, KRA officers had raided the company's premises in February 2017 on Luthuli Avenue, as well as one of the directors' home in Parklands, and carted away documents.
Following the raid, KRA had assessed the company to pay Sh700,584,224, but Digital Box disputed the amount, alleging that the taxman had misapplied the banking analysis test to establish its tax liabilities.
The company further faulted KRA for basing its assessment of sales made and VAT payable using delivery notebooks, which it claimed was an error.
