Lecture 119 Β· The taxman taxed airport work on flowers owned abroad, and the court zero-rated the export.
π»ππ πͺπππ πΉπππ: KRA refused Airflo KSh 46 million in VAT refunds, saying airport handling of export flowers was performed in Kenya and so taxed here. The Court of Appeal held the flowers were owned by customers abroad, the service was consumed there, and it was a zero-rated export, and ordered the refunds paid.
Illustration: Precursor
You handle goods at the airport, cold storage, screening, customs paperwork, to get them onto a plane. The goods already belong to a customer abroad, who gives the instructions and bears the risk, and you invoice that customer, not anyone here. The authority looks only at where you did the work and charges you the standard rate, refusing your export refund.
Put yourself in the exporter's chair. When you handle export goods in Kenya for a foreign owner, is the service used here, or abroad where the owner is?
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Precursor is published by the FinTech Association of Kenya and exercises independent editorial judgement under the Editorial Independence Charter. This article is labelled Precursor Executive Classroom, which marks commercial material. Knowledge on Tax and financial judgement.
Lecture 126 Β· A director kept meeting the taxman instead of appealing, and four years on the bill had only grown.
π»ππ πͺπππ πΉπππ: KRA confirmed a KSh 899,328 income-tax bill against Saphira, and its director spent four years in meetings and relied on his compliance certificates instead of appealing. The tribunal held meetings do not stop the thirty-day clock, a certificate is not proof of payment, and refused leave to appeal out of time; the debt had grown to KSh 1.4 million.
Tax and financial judgement Β· 4 min read Β· Paid
Lecture 125 Β· A rice importer called cleaning and repacking manufacturing, and the court said packaging is not making.
π»ππ πͺπππ πΉπππ: Mjengo claimed an investment deduction on KSh 1.5 million of machinery that cleaned and repackaged imported rice, calling it manufacturing. Through three forums the ruling held that packaging alone is not making goods, the rice remained rice, and a definition framed with 'means' is exhaustive. The deduction was refused.
Tax and financial judgement Β· 4 min read Β· Paid
Lecture 124 Β· A contractor said the money was his clients', had no agreements to show it, and the assessment stood.
π»ππ πͺπππ πΉπππ: KRA billed MU-BEI KSh 1.7 million after its eTIMS invoices far exceeded its declared sales. The company said the money was clients' funds for materials, passed on as an agent, but had no written agency agreements and no reconciliation. The tribunal held VAT fell due on the invoices and dismissed the appeal.
Tax and financial judgement Β· 4 min read Β· Paid