VAT is both the most litigated tax head and where taxpayers lose most. The taxman secured favorable outcomes in 59 per cent of the 1,211 matters. CPA Beatrice Njeri, Partner, Tax Compliance and Accounting at Tarra Agility Africa speaks during the recent Nairobi Private Wealth Conference, June 2026/ HANDOUT THE frequency of tax-related disputes between Kenya Revenue Authority and businesses have over the years increased and are now a part of doing business in Kenya.
According to a new study by Tarra Agility Africa, a Nairobi-based international tax, legal and accounting firm, the odds have shifted in favour of the revenue authority. An assessment of over 5,000 decided tax cases spanning a fifteen-year period and drawn from the Tax Appeal Tribunal and Kenya Courts, reveals that the taxman win rate is 52% compared to 36% in favour of taxpayers, with the rest being split.
Today, the revenue authority is winning close to six in ten cases. And the reasons are surprisingly ordinary; missing paperwork, unproven claims, and missed deadlines. Later this month, the firm is launching the Africa Tax Terminal, a platform that combines judicial precedence, legal and tax and accounting expertise, and cutting-edge technology that seeks to flag tax risks before they become tax bills.
The Star’s Martin Mwita spoke to CPA Beatrice Njeri, Partner, Tax Compliance and Accounting at Tarra Agility Africa on why firms are losing cases and the best way to go about compliance and avoiding prolonged litigations with the taxman. During our practice at Tarra Agility, we realized that most companies conduct deep tax health checks as an annual ritual.
These reports remain stuck at the board or senior management level and are rarely implemented by finance staff. Further, while many finance teams are aware of tax changes resulting from well publicized tax changes such as during the Budget period in June, tax changes from decided case law get less attention.
This is a structural gap. Finance teams are busy running the business and cannot reasonably be expected to keep tabs with decided court cases. Further, many tax cases remain unpublished and unavailable unless accessed through public court registries. Even when accessed, the sheer volume of these cases can be daunting even to the most enterprising finance team.
In the same vein, the law changes all year round. Parliament passes the Finance Bill every June, the KRA issues notices throughout the year, while the Tax Appeals Tribunal and courts make determinations weekly. Finance professionals also depend on fragmented tax training sessions offered across the year.
These are not industry-specific, never encompass the entire finance team and, therefore, barely result in structured tax governance protocols implementable on an ongoing basis to secure the company against a KRA challenge. Often, by the time an auditor flags tax issues during the annual audit, interest and penalties have accumulated for months.
The system is broken, either by default or design. Tell us a bit about the 15-year analysis you conducted and how exactly it will assist taxpayers navigate this system you describe as broken. We have mapped nearly 74,000 rules and tax principles applicable across tax heads such as withholding tax, customs, PAYE, Corporate Tax and VAT.
They have been extracted from case law, statutes, KRA notices and Double Tax Agreements, and constitute the engine that answers client queries and performs on-demand tax health checks. We aim to facilitate businesses to advance from periodic reviews to continuous monitoring, powered by timely information on legal changes, and backed by our team’s professional advice.