The Tax Appeal Tribunal has dismissed an application by a trading firm seeking to block a Sh207 million tax claim by the Kenya Revenue Authority (KRA), citing a failure to present signed documents in support of the case.
Extramile Company, a sugar and cereals dealer, suffered the setback after the tribunal ruled that it could not rely on unsigned pleadings to prosecute its appeal against tax assessments raised by the KRA in 2024.
The tribunal held that signatures are essential in authenticating and validating documents, as they link a legal document to a specific party or its authorised representative.
‘It is the finding of the Tribunal that the Appellant herein lacks the locus standi to advance or defend its claims based on the unsigned pleadings, thus void ab initio,’ the tribunal ruled.
The dispute arose after KRA conducted a compliance review covering the period between 2020 and 2023 and issued the company with additional tax assessments amounting to Sh207,028,556 on July 17, 2025.
The assessments related to corporation income tax (CIT), value added tax (VAT), pay-as-you-earn (PAYE), and withholding tax.
In its appeal filed on October 23, 2025, the trader argued that KRA had erred by relying on incorrect import data, sugar selling prices, and cereal purchase prices to determine expected sales based on National Cereals and Produce Board (NCPB) prices.
The company also challenged KRA’s inclusion of local sugar purchases in the sales calculations, the decision to tax a related-party balance of Sh37.4 million, and the apportionment of input VAT under Section 17(6) of the VAT Act.
Extramile maintained that it imports sugar and cereals from the East African market and sells them at prices determined by market conditions. It argued that its cereals, including maize, sorghum, and millet, are exempt from VAT under the East African Community Common External Tariff and the VAT Act.
The company further stated that all its sugar is imported and that it does not purchase sugar locally for resale.
The firm explained that before 2022, it did not operate a bank account and instead conducted transactions through accounts belonging to a related company, Daybreak Supplies Limited, and one of its directors, Jane Wangui Nyawira. In 2023, some imports were allegedly paid for by another related company, Alphastone Limited.
Extramile argued that its VAT claims related only to taxable supplies and that KRA had wrongly disallowed input tax deductions.
KRA defended the assessments, stating that a verification exercise revealed inconsistencies in the company’s returns.
The tax agency said it conducted stock and banking analyses using customs records, import quantities and market prices to determine expected revenue.
KRA said it compared the company’s declared sales with expected sales and identified underdeclared income.
It also disputed the related-party balance of Sh37.4 million, arguing that the company failed to provide sufficient supporting documents, including detailed agreements, invoices, and customs records.
The authority further stated that Extramile Company Ltd had failed to provide sales ledgers, purchase records, input VAT analysis, and other documents required to support its objections.
KRA also argued that the company failed to declare exempt sales in its VAT returns despite reflecting them in financial statements, prompting the authority to apportion input VAT as provided by law.