High Court upholds Sh29.2mn tax assessment against Jakoline Enterprises

Nairobi, Kenya - The High Court has reaffirmed a Sh29.2 million tax assessment against Jakoline Enterprises Limited following a reversal by the Tax Appeals Tribunal. The Kenyan Revenue Authority (KRA) imposed the assessment, totaling Sh14.48 million in Income Tax and Sh14.73 million in Value Added Tax (VAT) for the years 2017 through 2020.

The High Court overruled the Tribunal's November 10, 2023 decision and reinstated the Commissioner's objection, confirming the tax liability. The dispute stemmed from inconsistencies between Jakoline Enterprises' reported purchases in its Corporation Tax returns and its monthly VAT returns. The court required the company to provide a detailed explanation and reconciliation of the discrepancies, rather than merely submitting financial records to the KRA.

The Tax Appeals Tribunal earlier ruled in favor of Jakoline Enterprises, stating that the company had met its burden of proof by providing adequate documentation. However, the High Court disagreed, holding that the Tribunal had incorrectly deemed the submitted records sufficient to clear Jakoline Enterprises' burden of proof. Consequently, the High Court upheld KRA's appeal, maintaining the original tax assessment and costs were to be borne by both parties involved.