Nyamira farmers slapped with Sh210m tax burden

Tea farmers from Kebirigo Tea Factory in Nyamira County will be forced to shoulder Sh210.8 million in tax owed to the Kenya Revenue Authority (KRA).

The Tax Appeals Tribunal in Nairobi upheld a decision by KRA to recover the money that includes Value-Added Tax (VAT), Pay as You Earn (PAYE), and corporate income tax liability for the period July 2018 to June 2022. Justices Christine Muga, Boniface Terer, Elishah Njeru, Eunice Ng’ang’a, and Ololchike Spencer said the factory failed to provide documentary evidence of dispatches to prove its case. The judges upheld KRA’s decision dated May 31, 2024, and held that the taxman analysed the factory’s stock inventory and bank statements in concluding that the factory underdeclared its sales.

The judges noted that the factory failed to specify the volume of sales and the volume of dispatched outputs.

“Consequently, the tribunal finds that the appellant (factory) failed to discharge its burden of proving that the decision of the respondent (KRA) dated May 31, 2024, was incorrect. The appeal be and is hereby dismissed,” said Justice Muga.

In its appeal dated July 11, 2024, the factory said KRA assumed that all processed tea output unaccounted for represented omitted sales despite the explanation that not all dispatches represented sales.

The factory management stated that they had provided sufficient supporting documentation to explain the discrepancies between processed and dispatched products, purchased packaging materials and dispatched products, and utilised pallets and dispatched products.

Farmers deliver tea leaves to Kebirigo tea factory in Nyamira County on November 2, 2020.
[Sammy Omingo, Standard]

Tea farmers
from Kebirigo Tea Factory in Nyamira County will be forced to shoulder Sh210.8 million in tax owed to the Kenya Revenue Authority (KRA).

The Tax Appeals Tribunal in Nairobi upheld a decision by KRA to recover the money that includes Value-Added Tax (VAT), Pay as You Earn (PAYE), and corporate income tax liability for the period July 2018 to June 2022. Justices Christine Muga, Boniface Terer, Elishah Njeru, Eunice Ng’ang’a, and Ololchike Spencer said the factory failed to provide documentary evidence of dispatches to prove its case. The judges upheld KRA’s decision dated May 31, 2024, and held that the taxman analysed the factory’s stock inventory and bank statements in concluding that the factory underdeclared its sales.
The judges noted that the factory failed to specify the volume of sales and the volume of dispatched outputs.

“Consequently, the tribunal finds that the appellant (factory) failed to discharge its burden of proving that the decision of the respondent (
KRA
) dated May 31, 2024, was incorrect. The appeal be and is hereby dismissed,” said Justice Muga.
In its appeal dated July 11, 2024, the factory said KRA assumed that all processed tea output unaccounted for represented omitted sales despite the explanation that not all dispatches represented sales.
The factory management stated that they had provided sufficient supporting documentation to explain the discrepancies between processed and dispatched products, purchased packaging materials and dispatched products, and
utilised pallets
and dispatched products.