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Counties’ win as tribunal blocks VAT on own-source revenue
In a judgment concerning the Kiambu County government, the tribunal partly allowed an appeal by the devolved unit and substantially reduced a disputed tax demand from the initially Sh559 million to Sh194.6 million.
County governments have won a reprieve after the Tax Appeals Tribunal ruled that fees and levies collected by the devolved units as own-source revenue (OSR) are not subject to value-added tax (VAT), shining a spotlight on tax assessments by the Kenya Revenue Authority (KRA).
The tribunal also said the KRA cannot issue blanket assessments without clear justification, warning that failure to provide detailed reasons and breakdowns renders such decisions legally defective.
