The Tax Appeal Tribunal has endorsed tax liability assessments based on dividend payouts by corporates. This decision would embolden the Kenya Revenue Authority (KRA) to pursue corporates that distribute earnings to shareholders while paying little or no corporate income tax.
In a ruling involving Kenya Electricity Generating Company (KenGen), the tribunal upheld a Sh2.36 billion compensating tax assessment after finding that the power producer failed to demonstrate that dividends paid to shareholders, including the government, originated from profits already subject to tax.
