When KRA Suspends Your iTax Access: Why Documentation Still Matters

Case Study:Buidisa East Africa Limited v Kenya Revenue Authority (Tribunal Appeal E722 of 2025) [2026] KETAT 49 (KLR) (26 March 2026) (Judgment)

The Background

The Appellant, Buidisa East Africa Limited, was a tax‑resident company in Kenya. The KRA issued it with a VAT assessment totalling KSh 1,084,116 for the 2024 financial year. Aggrieved, the Appellant lodged an objection on 24 April 2025. However, on 9 June 2025, the KRA issued an Objection Decision confirming the assessments. The taxpayer then appealed to the Tax Appeals Tribunal (TAT).

The Appellant’s Grievance

The taxpayer raised two main grounds of appeal:

1. Unilateral Suspension of VAT Status: Buidisa East Africa alleged that in February 2024, the KRA suspended its VAT obligation status without prior notice or a hearing. The suspension remained in place until January 2025, during which period the Appellant was barred from accessing the iTax platform, could not file VAT returns, and was unable to claim legitimate input VAT on its business purchases.
2. Omitted Withholding Tax Credits: The taxpayer further argued that the assessment failed to account for withholding tax payments amounting to KSh 113,793 that had been deducted at source by its clients and duly remitted to the KRA.

The Appellant prayed that the appeal be referred to Alternative Dispute Resolution (ADR) for an expeditious and mutually agreeable resolution.

The KRA’s Response

The KRA’s defence was grounded on procedural non‑compliance. It stated that it had requested the taxpayer to provide relevant documents—audited financial statements, general ledgers, sales and purchase ledgers, and sales and purchase invoices—to support its objection. The Appellant failed to avail the requested documents.

The KRA relied on:

• Section 51(3) of the Tax Procedures Act (TPA), which provides that a notice of objection is validly lodged only if all relevant documents relating to the objection have been submitted.
• Section 24(2) of the TPA, which allows the KRA to assess a taxpayer’s liability using any information available to it.
• Section 31 of the TPA, which empowers the Commissioner to issue a best‑judgment assessment where a taxpayer’s records are inadequate.
• Section 59 of the TPA, requiring a taxpayer to produce documents for examination.
• Section 56(1) of the TPA and Section 30 of the Tax Appeals Tribunal Act, which place the burden of proof on the taxpayer to demonstrate that a tax decision is incorrect.

The Tribunal’s Analysis and Determination

The single issue for determination was whether the KRA’s assessments were justified. The TAT noted that the Appellant had provided only the audited financial statements for the year ended 2024 and a general ledger; the remaining documents requested by the KRA were not presented as evidence.

Burden of Proof: Citing Section 56(1) of the TPA, Section 30 of the TAT Act, and the well‑established “pendulum” principle, the Tribunal reiterated that the taxpayer bears the initial burden of proving that an assessment is excessive or incorrect. As the Tribunal observed, “the burden of proof swings between the taxpayer and the taxman, but is mostly on the taxpayer.” The easiest way to discharge this burden would have been to provide the documents that the KRA sought.

Failure to Submit Documents: The Tribunal found that the Appellant’s failure to provide the requested documents meant that its contentions remained mere averments. In the words of the Tribunal, “A party can only discharge its burden upon adducing evidence. Merely making pleadings is not enough.” (citing Alfred Kioko Muteti v Timothy Miheso & Another [2015] eKLR).

Shifting of the Evidential Burden: The TAT reaffirmed the principle that once a taxpayer provides prima facie evidence that an assessment is wrong, the burden shifts to the KRA to demonstrate that its assessment was not arbitrary. As held in Abyssinia Iron and Steel Ltd v Commissioner of Customs and Border Control (TAT No. 435 of 2022), “The bottom line is that once the Appellant has provided evidence that the Respondent’s assessment was wrong, then the Respondent must push back and show that its assessment was not arbitrary, capricious, or imagined. The onus will then shift back to the Appellant once the Respondent has discharged its burden on a balance of convenience to discharge the prima facie case that has been presented by the Respondent.” However, in this case, the taxpayer had provided no evidence to set the pendulum in motion.

The Suspension Argument: Although the Appellant argued that the KRA’s suspension of its VAT status had made compliance impossible, the Tribunal did not rule on the lawfulness of that suspension. Instead, it focused on the taxpayer’s failure to provide offline records that could have proved the assessment wrong. The Tribunal implicitly distinguished between a challenge to an administrative action (which would lie in judicial review proceedings) and an appeal against an assessment (which requires the taxpayer to produce documents to show the assessment is incorrect).

The Verdict

The Tribunal dismissed the appeal, upheld the KRA’s Objection Decision of 9 June 2025, and ordered each party to bear its own costs.

Key Takeaways for Taxpayers

1. Documentation is Non‑Negotiable: Under Section 23 of the TPA, taxpayers must maintain records for at least five years. In a dispute, the absence of records is almost always fatal. The Tribunal in Kirin Pipes Limited (Tribunal Appeal E1116 of 2024) held that “without supporting documents, the Appellant’s contentions remained mere averments.”
2. Burden of Proof Lies with the Taxpayer: Section 56(1) of the TPA and Section 30 of the TAT Act unequivocally place the initial burden on the taxpayer. It is not enough to assert that an assessment is wrong; the taxpayer must produce evidence—invoices, ledgers, bank statements, and other contemporaneous records—to prove the error.
3. A Valid Objection Requires Submission of All Relevant Documents: Section 51(3)(c) of the TPA mandates that an objection be accompanied by “all relevant documents relating to the objection.” Failure to do so renders the objection invalid, regardless of its merits. This was highlighted in the case of Elle Kenya Limited v Commissioner of Investigations & Enforcement Department (High Court Income Tax Appeal No. E024 of 2024), where the taxpayer lost an appeal worth KSh 525 million solely because it did not submit all relevant documents.
4. Procedural Unfairness Must Be Challenged Separately: If the KRA suspends a taxpayer’s VAT status or blocks access to the iTax platform without notice, the proper remedy lies in judicial review for violation of fair administrative action under Article 47 of the Constitution and the Fair Administrative Action Act. Such claims cannot be used as a defence in an appeal against an assessment without also providing the underlying financial records. The High Court in Opiyo & 2 Others v KRA (2025) allowed a constitutional challenge to the VAT Special Table to proceed, demonstrating that taxpayers can challenge administrative actions independently.
5. The Pendulum Can Swing—But Only If the Taxpayer Produces Evidence: As explained in the KRA’s own blog, “the burden of proof swings between the taxpayer and the taxman, but is mostly on the taxpayer.” However, the swing occurs only after the taxpayer presents credible evidence. In Cipla Kenya (2025) and Kasigau Carbon Project (2026), the Tribunal set aside assessments after the taxpayers provided coherent, albeit not perfect, documentation. In Equity Group Holdings Limited v Commissioner of Domestic Taxes [2021] KEHC 25 (KLR), the High Court held that once the taxpayer has provided documentation, the KRA must address it meaningfully and cannot impose tax liabilities arbitrarily.
6. Practical Steps When iTax Access Is Blocked: Even if the iTax portal is inaccessible, a taxpayer should:

• Request the KRA in writing to restore access or provide an alternative method of filing.
• Maintain all offline records (invoices, ledgers, bank statements, contracts) that support the correct VAT position.
• Lodge a formal objection within 30 days of the assessment, attaching the available documents.
• If the suspension is unlawful, file a judicial review application separately, citing Article 47 of the Constitution.

Conclusion

Buidisa East Africa Limited v Kenya Revenue Authority is a cautionary tale for all Kenyan taxpayers: procedural compliance and documentary evidence are the twin pillars of any successful challenge to a tax assessment. While the KRA’s suspension of the taxpayer’s VAT status may have been unfair, the Tribunal held that the taxpayer could not rely on that unfairness as a shield without also providing the documents needed to prove the assessment wrong.