Case Reference: International Cancer Institute Ltd v Kenya Revenue Authority (TATC/E1121/2025) [2026] KETAT 256 (KLR) (3 July 2026) (Judgment)
FACTUAL BACKGROUND
The Audit and Assessment
International Cancer Institute Limited, a not-for-profit organization specializing in cancer care, research, and training across Sub-Saharan Africa, was subjected to a tax audit by the Kenya Revenue Authority for the year 2021. The organization, which holds memberships with prestigious international bodies like ESMO and the UICC, had received grants from foreign donors to fund its humanitarian and scientific work. However, when KRA conducted an analysis of the institute’s audited accounts and amended returns, it identified inconsistencies in capital expenditure, miscellaneous expenses, and office expenses. The tax authority also noted that the institute had failed to withhold income tax on payments for professional, audit, and security fees.
On June 16, 2025, the Commissioner issued additional assessments totaling Kshs. 49,210,246 for corporation tax and Kshs. 183,016 for principal withholding tax. The institute was required to pay a total demand that would ultimately swell to Kshs. 67,007,218.
The Objection Process
The Appellant lodged an objection on July 31, 2025. However, the objection was limited exclusively to the corporation tax component of the assessment and did not challenge the withholding tax. When KRA requested supporting documentation—including receipts to support training programs, professional fees, software costs, medical equipment, audit fees, postage, and salaries—the Appellant failed to provide adequate evidence to support its claims for expenses totaling Kshs. 27,820,253.
On September 12, 2025, the Commissioner issued an Objection Decision confirming the additional taxes as previously assessed. Dissatisfied, the Appellant lodged an appeal with the Tax Appeals Tribunal, filing a notice of appeal dated September 22, 2025, and a memorandum of appeal on October 7, 2025.
The Appellant’s Substantive Arguments
The institute mounted a robust challenge to the tax assessment, raising several grounds of appeal. It argued that the grants it received from foreign donors should not be characterized as taxable income under Section 3 of the Income Tax Act, as the funds were specifically designated for particular projects and were never intended to generate profits. The organization contended that unspent project funds totaling Kshs. 69,834,805 should not be treated as profits chargeable to tax, as project timelines did not align with the conventional financial year. Additionally, the institute challenged the disallowance of various expenses, including Kshs. 22,677,984 for electronics and equipment expenditure and Kshs. 901,004 for furniture fitting, arguing these were legitimate expenditures for scientific research. The organization also maintained that it had properly accounted for all withholding taxes that merited deduction.
THE FATAL FLAWS: FAILURE TO OBJECT TO WITHHOLDING TAX AND LATE FILING
When the case came before the Tribunal, the Respondent raised a preliminary objection on two critical procedural grounds that would ultimately prove fatal to the appeal.
Failure to Pay Tax Not in Dispute
The Respondent pointed out that the Appellant’s objection had been lodged only against the corporation tax, meaning the withholding tax component was never properly disputed and therefore became “tax not in dispute” under the Tax Procedures Act. By failing to pay this undisputed tax or enter into an arrangement for its payment under Section 33 of the Act, the institute had rendered its entire objection invalid from the outset. The Respondent argued that Section 51(3)(b) of the Tax Procedures Act requires taxpayers to pay the full amount of tax that is not in dispute before an objection can be considered valid.
Late Filing of Appeal
The Respondent further contended that the appeal itself was filed out of time. While the notice of appeal bore the date September 22, 2025, the Tribunal’s official Case Tracking System showed it was only actually lodged on November 26, 2025—well beyond the statutory thirty-day period prescribed by Section 13(1) of the Tax Appeals Tribunal Act. The Appellant claimed it had filed earlier by email, but provided no documentary evidence to prove this. No application for extension of time had been made or granted.
The Appellant’s Defence
The Appellant argued that the withholding tax assessment was “intertwined” with the broader dispute regarding the taxability of donor-funded grants and that no concession had been made in respect of any part of the assessment. The institute maintained that all taxes that merited withholding had been deducted and paid. It also submitted that the Notice of Appeal was transmitted to both the Tribunal Secretariat and the Respondent by electronic mail on September 23, 2025, and that the appeal was filed on October 7, 2025, which was within the required timelines. However, the Appellant failed to produce the actual notice of objection or any contemporaneous correspondence demonstrating that the withholding tax assessment had been challenged.
THE LEGAL PRINCIPLES: OBJECTIONS MUST BE SPECIFIC AND TIMELINES ARE MANDATORY
The Tribunal applied established jurisprudence and statutory provisions to find the appeal incompetent on procedural grounds.
Specific Objections Required for Each Tax Head
The Tribunal emphasized that Section 51(3) of the Tax Procedures Act requires a notice of objection to state precisely the grounds of objection, the amendments required, and the reasons for those amendments. The purpose of this requirement is to distinguish between tax that remains genuinely in dispute and tax that the taxpayer has elected not to contest. A taxpayer who receives an assessment comprising several distinct tax heads is required to specify, with precision, which aspects of the assessment are challenged. Any component of the assessment that is neither objected to nor otherwise disputed ceases to be the subject of controversy and is treated as tax not in dispute.
The Tribunal applied the High Court’s decision in Commissioner of Domestic Taxes v Dinesh Construction Limited [2025] KEHC 17058 (KLR) , which held:
“If an assessment covers 5 items, and the taxpayer only provides grounds objecting to 2, then the remaining 3 items are legally accepted. The Commissioner is entitled to treat the unobjected portions as final and conclusive debts.”
The Tribunal also cited Commissioner of Domestic Taxes v Diara Limited [2022] KEHC 80 (KLR) , where the Court emphasized that “the objection process is the primary mechanism for crystallizing the dispute. Once the objection window closes, any item not traversed by the objection becomes a crystallised debt.”
Payment of Tax Not in Dispute is Mandatory
The Tribunal found that since the withholding tax assessment remained unchallenged, it became tax not in dispute for purposes of the Act. Section 52(2) of the Tax Procedures Act provides that a Notice of Appeal relating to an assessment is valid only where the taxpayer has paid the tax not in dispute or entered into an arrangement with the Commissioner for payment of that amount before lodging the appeal. The Appellant neither produced evidence of payment of the withholding tax nor demonstrated that it had obtained an extension of time or entered into any payment arrangement.
Strict Adherence to Appeal Timelines
Section 13(1) of the Tax Appeals Tribunal Act gives taxpayers thirty days to file a notice of appeal after receiving the objection decision. The objection decision was issued on September 12, 2025, meaning the institute had until October 12, 2025, to file its notice. However, the Tribunal’s official records showed the notice was only filed on November 26, 2025. The Tribunal emphasized that in the absence of cogent evidence demonstrating that the Notice of Appeal was validly lodged within the statutory period, it was unable to depart from its official records.
The Burden of Proof Lies with the Taxpayer
Section 56(1) of the Tax Procedures Act places the burden of proof on the taxpayer to show that a tax decision is incorrect. Where the validity of an appeal depends upon whether a particular assessment was objected to, it is incumbent upon the taxpayer to produce the Notice of Objection or other credible evidence showing that the disputed tax head was expressly challenged. The Appellant failed to discharge this burden.
THE TRIBUNAL’S DETERMINATION
The Tribunal struck out the appeal without ever considering the substantive tax dispute. The institute never got its day in court to challenge the Kshs. 67 million assessment on the merits. The Tribunal made the following orders:
- The Appeal was struck out in its entirety.
- Each party was ordered to bear its own costs.
The Tribunal explicitly declined to rule on the substantive tax issues raised by the institute, including whether donor grants are taxable income, whether unspent project funds constitute profits, or whether the disallowed expenditures were justified.
PRACTICAL IMPLICATIONS FOR TAXPAYERS AND PRACTITIONERS
This case reinforces several critical principles that every taxpayer and tax professional must understand:
1. Objections Must Cover Every Disputed Tax Head
If an assessment includes multiple tax types—such as corporation tax, withholding tax, VAT, or PAYE—your objection must clearly state grounds for each item you dispute. Failing to object to a specific item means that tax becomes “not in dispute” and must be paid before you can proceed with your objection or appeal. You cannot avoid this requirement by arguing that all tax is “intertwined.”
2. Pay “Tax Not in Dispute” Before Filing an Appeal
Section 51(3)(b) of the Tax Procedures Act is not a mere technicality. It is a substantive legal requirement. You must pay the full amount of tax that is not in dispute, apply for an extension of time to pay, or enter into a payment arrangement with the Commissioner. Failure to do so renders your objection invalid and your appeal incompetent.
3. Strict Adherence to Timelines is Non-Negotiable
The Tax Appeals Tribunal will not hear an appeal filed after the statutory thirty-day period unless an application for extension of time has been made and granted. Even if you file by email, you must ensure you have documentary evidence to prove the date of filing. The Tribunal will rely on its official records in the absence of such evidence.
4. The Burden of Proof is on the Taxpayer
Section 56(1) of the Tax Procedures Act places the burden on the taxpayer to prove that a tax decision is incorrect. To discharge this burden, you must file proper pleadings and provide organized, relevant, and indexed documentation. In this case, the Appellant failed to produce the notice of objection to prove that the withholding tax had been challenged.
5. Procedural Compliance is a Jurisdictional Prerequisite
The requirements for filing a valid objection and appeal are not minor procedural technicalities that can be cured under Article 159(2)(d) of the Constitution. They are substantive legal requirements that must be strictly followed. Failure to meet any of these requirements deprives the Tribunal of jurisdiction to hear the case, regardless of how strong your substantive arguments may be.
6. Engage Qualified Professionals
Tax disputes are complex, and procedural rules are strict. Engaging qualified tax lawyers or consultants can help you avoid costly mistakes like failing to object to all tax heads, failing to pay tax not in dispute, or missing appeal deadlines. The cost of professional advice is small compared to a Kshs. 67 million tax bill.
7. Review Your Documents Before Filing
Before filing any legal document, double-check that your objection covers all disputed tax heads, that you have paid or made arrangements for tax not in dispute, and that you are filing within the statutory deadlines. These simple steps can save you from devastating consequences.
CONCLUSION
The International Cancer Institute case is a cautionary tale for every taxpayer in Kenya. It reminds us that the tax dispute resolution process is not just about arguing the law and the facts—it is also about following the rules. A Kshs. 67 million tax bill is a heavy burden, but losing the chance to challenge it because of procedural missteps is a tragedy.
This case highlights that compliance is built on both substance and process. Attention to detail, proper documentation, and adherence to statutory requirements are often what determine whether a matter is heard on its merits. Strong cases can be lost over avoidable compliance oversights, reinforcing the importance of thorough preparation before any filing.
