Notice of tax investigations not appealable decision: Tribunal
By Samuel Migele
Tax Appeals Tribunal
upheld the Kenya Revenue Authority’s position in a case filed by thr
ee taxpayers challenging a move by KRA’s Commissioner for Investi
gations and Enforcement to issue
them with Notices of Tax Investigations.
In their appeal to the Tribunal, Mobile Galary Limited,
Anand Kenya Trading Limited and Smart Phone Stores Limited had
argued that Commissioner for Investigations and Enforcement’s Not
ices of Tax Investigations issued upon them were unconstitutional
The Commissioner had conducted investigations into the tax affairs
of three companies and preliminary findings indicated that Mobile
owed taxes of up to Kshs. 781,573,257, Anand Trading Kenya Limite
d owed KRA Kshs. 109, 686, 655, while Smart Phone Stores Limited o
wed Kshs. 273,338,150.
In the Notices, the Commissioner had invited the three
companies to resolve the issue within 14 days or risk prosecution fo
r tax evasion. The three companies argued that the notices amounte
d to a final decision owing to the looming criminal prosecution and t
hat the demand for payment without an assessment being issued fir
st was not only unreasonable but also unlawful.
The KRA’s position was that the notices were meant to inform the ta
xpayers of the investigations. The preliminary findings had indicate
d that there was undeclared income which was an indication of the
tax offences committed by the taxpayers. The Commissioner further
contended that the notices were
meant to give the taxpayers an opportunity to explain the
deposits in their bank accounts.
The Tax Appeals Tribunal delivered its Judgment
agreeing with the Commissioner’s preliminary objection that a Notic
e of Tax Investigation is not an appealable decision
as contemplated by the Tax Procedures Act.
“It is premature for the Appellant to file an appeal to this Tribunal on
the basis of an initial Notice of Investigation issued by the Respondent.
If the Tribunal was to stop investigations at such an early stage, on th
e grounds relied upon by the Appellant, such an order will undoubtedl
y hinder the Respondent in carrying out its statutory mandate,” The