NAIROBI, Kenya, May 9 – The Tax Appeals Tribunal has dismissed most of an Sh8.3 billion tax demand issued by the Kenya Revenue Authority against the Nairobi City County Government.
The tribunal ruled that much of the assessment by KRA was not properly supported and failed to consider reconciliations and documents submitted by the county government during the audit process.
“The Respondent’s assessment was grossly misstated, without due regard for reconciling items,” the tribunal said in its ruling.
The dispute arose after KRA conducted a tax compliance audit covering the period between 2019 and 2023 and later demanded more than Sh8.2 billion over alleged unpaid PAYE, withholding tax, VAT and NITA levies.
However, Nairobi County challenged the assessment, arguing that it included duplicated invoices, cancelled transactions, exempt supplies, internal transfers and taxes that had already been paid.
The tribunal upheld only the NITA levy component and confirmed a reconciled tax liability of Sh130.7 million that had earlier been agreed upon by both parties during reconciliation meetings.
The ruling effectively cancels the bulk of the disputed tax claim, dealing a setback to KRA’s efforts to recover the amount.
