Tax Appeal Tribunal has set aside 3 billion shillings tax demand by Kenya Revenue Authority (KRA) from London Distillers.
The Tribunal ruled that KRA did not justify, either in law or otherwise, its Corporation Tax, Excise Duty, and VAT assessment on the company.
“The Tribunal is unable to establish the basis of the Respondent’s computed variance of 168,088 litres of ready-to-drink product. Further, and as has been discussed in depth in the Appellant’s submissions, the Respondent did not respond to the Appellant’s explanations on the Appellant’s ready-to-drink stamps usage neither did the Respondent verify the same when it visited the Appellant’s premises,” ruled the tribunal.
The dispute arose from KRA’s assessment of Income Tax, Excise Duty, and VAT on the company’s transactions for the period 2015 to 2019.
KRA issued its preliminary findings on July 3, 2020, to London Distillers seeking 2.6 billion shillings taxes after analyzing the income declared vis-a-vis banking, income reconciliation, excise stamps reconciliation, input-output analysis of bottles, and the overall taxable sales.
However, London Distillers appealed the finding arguing that KRA failed to consider and appreciate the clarifications it provided with respect to the impact of non-sales transactions as opposed to actual sales transactions in the banking analysis and findings.
