https://new.kenyalaw.org/akn/ke/judgment/ketat/2026/280

**REPUBLIC OF KENYA** **IN THE TAX APPEALS TRIBUNAL AT NAIROBI** **TAX APPEAL NO. E1200 OF 2025** **JILK CONSTRUCTION COMPANY LIMITED.............................................APPELLANT** **VERSUS** **COMMISSIONER OF LEGAL AND BOARD SERVICES............................RESPONDENT** **JUDGMENT** **BACKGROUND** 1. The Appellant is a private limited liability company incorporated in Kenya under the Companies Act whose principal business is civil and general construction, encompassing road and bridge infrastructure development, commercial and residential building construction, telecommunication civil works, irrigation and dam works, power and lighting installation projects, substation equipment installation and the manufacture and supply of premix concrete. 2. The Respondent is the principal officer appointed under Section 13 of the Kenya Revenue Authority Act, Cap 469, Laws of Kenya. The Kenya Revenue Authority is charged with the responsibility of, among others, the assessment, collection, accounting and general administration of tax revenue on behalf of the Government of Kenya. 3. The Respondent undertook an audit of the Appellant's tax affairs covering Corporation tax for the period January 2019 to December 2023, and PAYE, VAT and Withholding tax for the period June 2020 to December 2024. An audit notice was issued to the Appellant on 20th February 2025 followed by a pre-assessment notice. 4. The Respondent thereafter issued an assessment notice dated 4th July 2025 demanding a total of Kshs. 1,382,011,664.20, comprising principal taxes of Kshs. 948,612,924.00, penalties of Kshs. 47,430,646.20 and interest of Kshs. 385,968,094.00, and broken down by tax head as Corporation tax of Kshs. 737,590,491.15, VAT of Kshs. 331,332,834.45 and PAYE of Kshs. 313,088,338.60. 5. The Appellant lodged a manual notice of objection dated 6th August 2025, received by the Respondent on 7th August 2025, the assessment not having been reflected on its iTax ledger at the time. 6. In the course of the review of the objection, the Respondent, *vide* email correspondence of 27th August 2025, 9th September 2025 and 16th September 2025 and meetings held on 27th August 2025 and 25th September 2025, requested the Appellant to provide, among others, reconciliation schedules supported by invoices and withholding certificates, invoices, proof of payment and the expense ledger for the subcontractor fees, the withholding certificates and invoices from the National Irrigation Board, month-by-month payroll breakdowns, sign-out schedules for casual workers, and evidence of payment to the casual workers through bank statements or the cashbook. 7. The Respondent subsequently issued an objection decision dated 2nd October 2025 partially allowing the objection. 8. Aggrieved by the objection decision, the Appellant lodged a Notice of Appeal dated and filed on 27th October 2025. **THE APPEAL** 1. The Appeal is premised on the Memorandum of Appeal dated and filed on 27th October 2025 wherein the Appellant raised the following grounds of appeal: i. That the Respondent erred in law and in fact by charging Corporation tax for the year 2019 amounting to Kshs. 87,623,590.73, which arose from an advance payment by Kenya Ports Authority that had already been deducted from subsequent invoices, and by ignoring the Appellant's reconciliation evidence contrary to Section 51(10)(b) of the Tax Procedures Act, 2015 (TPA). ii. That the Respondent erred in law and in fact by disallowing invoices JCC/INV/339/EPZA-2019, JCC/INV/319/CGN-2019, JCC/INV/435/EPZA-2020 and JCC/INV/364/EPZA-2019 on the ground that the amounts withheld differed from those in the invoices, notwithstanding evidence that the variances arose from client data entry errors and timing differences, contrary to Article 47 of the Constitution and Section 4(3)(a) of the Fair Administrative Action Act, 2015. iii. That the Respondent erred in disallowing invoice JCC/INV/451/CGK-2021, being an advance payment from a client that was fully accounted for and deducted in subsequent invoices, whose inclusion occasioned double taxation contrary to Section 3(2) of the Income Tax Act, Cap 470 (ITA). iv. That the Respondent erred in disallowing invoice JCC/INV/527/KERICHO-2022 whose withholding certificate was issued in 2023, creating a timing difference, notwithstanding that both the invoice and the corresponding withholding certificate were provided. v. That the Respondent erred in disallowing direct labour of Kshs. 280,899,255.00 for the year 2023 despite evidence that the correct figure was Kshs. 74,049,041.90 as per the Appellant's filed income tax return, the difference having resulted from the Respondent's arithmetical errors, and by ignoring site labour documentation and proof of payment showing wages below the PAYE threshold in violation of Section 5(2) of the Income Tax (PAYE) Rules. vi. That the Respondent failed to consider material evidence including invoices and interim payment certificates, payroll records and muster rolls for casual site workers, and contracts and the Deed of Assignment confirming zero-rated supplies, rendering the objection decision procedurally unfair and legally defective under Section 51(10) and (11) of the TPA. **THE APPELLANT'S CASE** 1. The Appellant's case is premised on its Statement of Facts dated and filed on 27th October 2025 together with the documents attached thereto. The Appellant did not file written submissions. 2. The Appellant asserted that it duly filed its income tax and VAT returns for the years 2019 to 2023 and that, following a desk audit, the Respondent issued the assessment of 4th July 2025 alleging understatement of taxable income across Corporation tax, VAT and PAYE. It maintained that its objection was supported by invoices, interim payment certificates, contracts and reconciliations, and that the objection decision omitted to consider key reconciliations, ignored material evidence and misapplied the relevant tax laws. 3. On Corporation tax, the Appellant contended that the alleged variance of Kshs. 979,154,326.00 arose from duplication and misclassification errors by its customers, principally KPA and KBL, which it demonstrated through invoices, payment schedules and subsequent billing. While acknowledging that the Respondent accepted partial adjustments, the Appellant faulted the Respondent for failing to explain the unreconciled variance of Kshs. 87.6 million, contrary to Section 51(10)(b) of the TPA which requires the Commissioner to give reasons for each adjustment. 4. Regarding the subcontractor fees of Kshs. 35,477,649.00, the Appellant argued that the expenses were wholly disallowed for want of proof of payment despite invoices having been furnished, and that the Respondent failed to apply Section 15(1) of the ITA which permits the deduction of expenditure wholly and exclusively incurred in the production of income. It posited that the proper treatment for a failure to withhold would have been to levy withholding tax at 5% on the applicable payments rather than to disallow the expense in its entirety, which inflates taxable income unjustly. 5. On VAT, the Appellant explained that it took over a contract initially awarded to Afrikon Company Ltd by the National Irrigation Board in respect of the Bura Irrigation Project by a Deed of Assignment dated 27th August 2021, and that the project was zero-rated at the time of the assignment pursuant to the VAT (Exemption) Order, 2018. 6. It maintained that its client erroneously withheld VAT on those supplies, creating an artificial VAT liability of Kshs. 649,677,949.00, that it correctly declared output VAT in the periods relating to invoice issuance, and that the Respondent's confirmation of the variance offended the VAT Act, 2013 and Article 210(1) of the Constitution. It added that some VAT withholdings were remitted by the client for supplies relating to previous years, thereby distorting period matching, and that the Respondent omitted to reconcile the timing variances despite acknowledging them. 7. Concerning PAYE, the Appellant indicated that it engaged casual workers for project sites in remote regions, most of whom were illiterate and undocumented, did not possess valid identification or KRA PINs, and requested one trusted team member to receive payment on their behalf as supported by muster rolls and transfer records. 8. It insisted that the workers earned wages below the PAYE threshold under Section 5(2) of the Income Tax *(PAYE) Rules,* that payment records and transfer confirmations were available for verification, that the total actual payroll in 2023 was Kshs. 92,290,878.00 and not Kshs. 354,959,857.00 as assessed, and that the PAYE audit schedule contained numerous computational errors. 9. The Appellant further took issue with the objection decision for omitting to account for interest already accrued, failing to clarify whether withholding tax credits were netted off, thereby creating potential for double taxation, and reserving the right to reopen the assessments, which it construed as implying incompleteness contrary to Section 51(11) of the TPA which renders objection decisions final unless appealed. 10. In conclusion, the Appellant propounded that it discharged the burden of proof placed upon it by Section 56(1) of the TPA through the invoices, certificates, reconciliations and payment evidence tendered, all of which were improperly disregarded; that the omissions amounted to procedural impropriety and a failure to consider relevant evidence in violation of Section 4(3)(a) of the Fair Administrative Action Act, 2015; and that the sustained assessments lack factual and legal foundation and warrant reversal. **APPELLANT'S PRAYERS** 1. The Appellant prayed that the Tribunal grants the following orders: a) The Appeal be allowed in its entirety; b) The Respondent's objection decision dated 2nd October 2025 be set aside; c) The Appellant's income tax, VAT and PAYE positions as filed be declared valid and merited; and d) The penalties and interest be vacated in accordance with Section 89 of the Tax Procedures Act. **THE RESPONDENT'S CASE** 1. The Respondent's case is premised on its Statement of Facts dated and filed on 11th December 2025 together with the documents attached thereto, and its written submissions dated and filed on 12th June 2026. 2. The Respondent recounted that an audit notice was issued to the Appellant on 20th February 2025 and a pre-assessment notice followed; that the Appellant failed to provide the requested documents to the assessing officer, whereupon the assessment notice of 4th July 2025 was issued; that the Appellant objected manually on 7th August 2025; that the Appellant was, through various correspondence, requested to furnish information and documents in support of its objection; and that upon consideration of the objection, the objection decision of 2nd October 2025 was issued partially allowing the objection. 3. On the disallowed Corporation tax of Kshs. 87,623,590.73 for the year 2019, the Respondent explained that the amount was disallowed because the Appellant failed to provide a confirmation from KPA that the invoice was erroneously claimed by it, and that the amounts which were supported by invoices, contracts and email correspondence from KPA confirming the erroneous claims, amounting to Kshs. 891,402,538.37, were allowed. It added that any invoices affected by the alleged erroneous withholding variances that were supported by invoices, withholding certificates and clear declarations on iTax were equally allowed. 4. Regarding the advance payment under invoice JCC/INV/451/CGK-2021, the Respondent noted that whereas the Appellant claimed that the advance payment was erroneously withheld by the supplier, no evidence was furnished to demonstrate that the withholding certificate was erroneous or that the Appellant undertook any effort to correct the alleged error. 5. On the PAYE assessment relating to direct labour, the Respondent acknowledged that the Appellant attributed the variances to casual workers earning wages below the PAYE threshold and provided Excel schedules showing the breakdown of the casual workers and the amounts paid to them. It however pointed out that the Appellant failed to provide evidence of payment to the casual workers as requested in the Respondent's email of 27th August 2025, and that sign-out schedules were provided only for week 9 of 2020. 6. The Respondent averred that the documents requested but not provided would have enabled it to ascertain whether the wages were incurred and to reconcile the variance established. The Respondent added that all evidence tendered was considered and that whatever was supported was allowed, including the correction of computational errors in the manual assessment which reduced the PAYE principal tax. 7. The Respondent emphasised that the Appellant was requested to provide various documents to demonstrate that the assessment as issued was erroneous or excessive, as evidenced by the email correspondence attached to its Statement of Facts, but the records were not availed. Accordingly, the Respondent found that the Appellant did not validate its objection as required by Section 51(3) of the TPA and thus failed to discharge its burden of proof under Section 56(1) of the TPA. 8. The Respondent maintained that no supporting evidence or information was placed before it to demonstrate that the assessment is erroneous or in any way excessive, and that the Appellant merely made assertions in its pleadings despite having knowledge of the basis of the assessment and of the documents required to discharge the burden of proof. It relied on **National Social Security Fund Board of Trustees v Commissioner of Domestic Taxes, Kenya Revenue Authority [2016] eKLR**, where the High Court affirmed at paragraph 36 that: - *“There is a world of difference between assertion and proof. That which a party puts to be his case is an assertion. The party needs to adduce evidence to support his said assertion with a view to supporting his case.”* 1. The Respondent further invoked the decision of Madan J in **CMC Aviation Ltd v Cruisair Ltd (No. 1) [1978] KLR** where it was observed that: - *“Pleadings contain the averments of the parties concerned. Until they are proved or disproved, or there is an admission of them or any of them, by the parties, they are not evidence and no decision could be founded upon them. Proof is the foundation of evidence... Until their truth has been established or otherwise, they remain un-proven.”* 1. On the importance of relevant and material evidence in discharging the burden of proof in tax disputes, the Respondent cited **Commissioner of Domestic Taxes v Trical and Hard Limited (Tax Appeal E146 of 2020) [2022] KEHC 9927 (KLR)**, where it was held that: - *“From the above, it is clear that the evidential burden of proof rests with the taxpayer to disprove the Commissioner and that once competent and relevant evidence is produced, then this burden now shifts to the Commissioner. I have emphasized and underlined ‘competence’ and ‘relevance’ because it is only evidence that meets these two tests that demolishes the presumption of correctness and swings the burden to the Commissioner. This means that even if one avails evidence but then it is found that the same is incompetent or irrelevant, then the burden continues to remain with the taxpayer.”* 1. The Respondent also placed reliance on **Kenya Revenue Authority v Man Diesel & Turbo Se, Kenya [2021] eKLR**, where the Court underscored that the Commissioner's determinations of tax deficiencies are presumptively correct, that the presumption remains until the taxpayer produces competent and relevant evidence to support its position, and that placing the burden of proof on the taxpayer reflects the unique nature of the tax system founded on the three-fold justifications of the presumption of correctness, the government's need for revenue and the taxpayer's possession of the evidence. 2. That the Court further clarified that the taxpayer's burden comprises two parts: establishing, with evidence, the underlying facts on which the law is to operate, and demonstrating that the operation of the law when applied to those facts establishes that the assessment is excessive or erroneous. 3. In conclusion, the Respondent asserted that the Appellant had a duty under Section 51(3) of the TPA to provide all relevant documentation in support of its objection and that it has not sufficiently proved that the Respondent's decision is incorrect or that the assessment is excessive. **RESPONDENT'S PRAYERS** 1. The Respondent prayed that the Tribunal: a) Upholds the objection decision as the same was proper as provided under the Tax Procedures Act, 2015 and finds that the taxes demanded therein are due and payable; and b) Dismisses the Appeal with costs to the Respondent as the same is without merit. **ISSUES FOR DETERMINATION** 1. The Tribunal has considered the Parties' pleadings, documentation and submissions and is of the considered view that the issues falling for its determination are as follows: **A. Whether the Tribunal has jurisdiction to determine the alleged violation of Article 47 of the Constitution and the Fair Administrative Action Act, 2015;** **B. Whether the objection decision dated 2nd October 2025 was invalidated by the alleged failure to give reasons under Section 51(10)(b) of the Tax Procedures Act; and** **C. Whether the Respondent erred in confirming the assessments in the objection decision dated 2nd October 2025.** **ANALYSIS AND FINDINGS** 1. The Tribunal proceeds to analyse the issues as hereunder. **A. Whether the Tribunal has jurisdiction to determine the alleged violation of Article 47 of the Constitution and the Fair Administrative Action Act, 2015** 1. The Appellant's second and sixth grounds of appeal, and portions of its Statement of Facts, invite the Tribunal to find that the Respondent's decision violated the Appellant's right to fair administrative action under Article 47 of the Constitution as read with Section 4(3)(a) of the Fair Administrative Action Act, 2015. 2. Before venturing into that invitation, the Tribunal must first satisfy itself that it is clothed with the jurisdiction to entertain it, for as was famously held in **Owners of the Motor Vessel “Lillian S” v Caltex Oil (Kenya) Ltd [1989] KLR 1**, jurisdiction is everything and without it, a court or tribunal must down its tools. 3. This Tribunal is a creature of statute, established under Section 3 of the Tax Appeals Tribunal Act, 2013, and its jurisdiction under Section 12 of that Act is confined to hearing appeals against tax decisions made under the tax laws. 4. The interpretation of the Constitution and the determination of questions of denial, violation or infringement of the rights and fundamental freedoms in the Bill of Rights, as well as the judicial review of administrative action under the Fair Administrative Action Act, are, by dint of Articles 23, 47(3) and 165(3)(b) and (d) of the Constitution, the preserve of the High Court. The Tribunal therefore has no jurisdiction to grant declarations that the Respondent violated Article 47 of the Constitution or the Fair Administrative Action Act, and it declines the invitation to do so. 5. That notwithstanding, the Tribunal is not thereby disabled from determining the Appeal. The gravamen of the Appellant's complaint, shorn of its constitutional contentions, is that the Respondent disregarded the evidence tendered at the objection stage and confirmed assessments that are excessive and erroneous. That is a quintessential merits question squarely within the Tribunal's remit under Section 12 of the Tax Appeals Tribunal Act, and the Tribunal proceeds to determine it as such. **B. Whether the objection decision dated 2nd October 2025 was invalidated by the alleged failure to give reasons under Section 51(10)(b) of the Tax Procedures Act** 1. Section 51(10) of the TPA obligates the Commissioner, in making an objection decision, to include a statement of findings on the material facts and the reasons for the decision. The Appellant argued that the Respondent failed to explain the unreconciled variance of Kshs. 87.6 million and omitted to reconcile acknowledged timing variances. 2. The Tribunal has perused the objection decision. Contrary to the Appellant's assertion, the Tribunal notes that the decision addressed each ground of objection in turn under a statement of findings: it set out the review of the customers' purchase claims, tabulated the allowances made in respect of the KBL, KPA and Export Processing Zone invoices, and derived the unreconciled variance of Kshs. 87,623,490.73 arithmetically from the original variance of Kshs. 979,154,326.00; it tabulated the timing difference adjustments allowed on both the IT2C versus WHIT and the VAT3 versus WHIT comparisons. 3. Additionally, the objection decision explained that the subcontractor fees disallowance was sustained because the general ledger and proof of payment requested to verify the expense under Section 15 of the ITA were not submitted; it explained that the VAT assessment for 2022 was sustained because supporting invoices and a linkage to the WHVAT certificates were not demonstrated; and it explained that the PAYE variance was sustained for want of evidence of payment to the casual workers. 4. The Tribunal notes that the residual amounts were confirmed not because reasons were withheld, but because the evidence necessary to displace them was not supplied. The Tribunal, thus, finds that the Appellant’s complaint under Section 51(10)(b) of the TPA is accordingly without foundation. The objection decision was not defective. **C. Whether the Respondent erred in confirming the assessments in the objection decision dated 2nd October 2025** 1. The principles that govern the issue of burden of proof are well settled. Section 56(1) of the TPA provides that in any proceedings under Part VIII of that Act, the burden shall be on the taxpayer to prove that a tax decision is incorrect. Section 30 of the Tax Appeals Tribunal Act is to the same effect. Further, Section 51(3)(c) of the TPA requires a taxpayer, in lodging a notice of objection, to support the objection with all the relevant documents relied upon. 2. The authorities relied upon by the Respondent, **National Social Security Fund Board of Trustees v Commissioner of Domestic Taxes (supra)**, **CMC Aviation Ltd v Cruisair Ltd (supra)**, **Commissioner of Domestic Taxes v Trical and Hard Limited (supra)** and **Kenya Revenue Authority v Man Diesel & Turbo Se, Kenya (supra)**, refer to the law: an assessment enjoys a presumption of correctness which endures until the taxpayer dislodges it with competent and relevant evidence. 3. Pleadings and assertions, however forcefully advanced, are not evidence; and the taxpayer's burden entails both establishing the underlying facts with evidence and demonstrating that the application of the law to those facts renders the assessment excessive or erroneous. It is against this yardstick that the Tribunal examines each of the confirmed items. **(i) The unreconciled Corporation tax variance of Kshs. 87,623,490.73 for the year 2019** 1. The variance of Kshs. 979,154,326.00 arose from a comparison of the sales declared by the Appellant against the purchases claimed from it by its customers. The record demonstrates that where the Appellant supported its explanations, the Respondent allowed them: duplicated claims by KBL of Kshs. 50,178,081.25 confirmed by that customer, duplicated and overclaimed KPA invoices of Kshs. 841,224,457.12 confirmed through invoices, contracts and email correspondence from KPA, and an overclaimed Export Processing Zone invoice of Kshs. 128,296.90, together accounting for over 91% of the original variance, were all vacated at the objection stage. 2. What remained was the unreconciled balance of Kshs. 87,623,490.73, in respect of which the Respondent required, and the Appellant did not furnish, a confirmation from KPA that the underlying invoices had been erroneously claimed. Before this Tribunal, the Appellant recharacterised the amount as an advance payment from KPA already deducted from subsequent invoices, yet it placed no invoices, payment schedules, subsequent billing, ledger extracts or correspondence from KPA before the Tribunal to bear out that narrative. 3. The Appellant cannot succeed on a recharacterization that is itself unevidenced. Guided by the distinction between assertion and proof drawn in the **NSSF case (supra)**, the Tribunal finds that the Appellant failed to discharge its burden in respect of this item and the Respondent’s confirmation of the variance and attendant assessment were justified. **(ii) The withholding variance invoices and the advance payment invoice JCC/INV/451/CGK-2021** 1. The Appellant attributed the variances between the turnovers in its income tax returns and the WHIT certificates to client data entry errors, incorrect amounts withheld and timing differences. Here again, the record shows that the demonstrated timing differences were adjusted and allowed in the objection decision, in the sums of Kshs. 121,128,641.09, Kshs. 431,268,190.37 and Kshs. 34,942,786.85 for the years 2020, 2021 and 2023 respectively, and it is only the unreconciled balances that were brought to charge. 2. With respect to the retention-related variances, the Respondent's finding was that although the Appellant provided the invoices relating to the retentions, the final payment certificates were not provided, and in the absence of a general ledger it could not be established whether the retentions were paid and accounted for in the Appellant's income tax. With respect to invoice JCC/INV/451/CGK-2021, the Appellant's contention that the advance payment was erroneously withheld by the supplier was unaccompanied by any evidence that the withholding certificate was erroneous or that the Appellant took any step to have it corrected or cancelled. 3. Those evidentiary gaps persisted before this Tribunal: neither the interim payment certificates, nor the final certificates, nor the general ledger, nor any corrective correspondence was exhibited by the Appellant. The Appellant having retained and enjoyed the withholding tax credits arising from the impugned certificates, the Tribunal finds no basis upon which to disturb the Respondent's findings on these items. **(iii) The subcontractor fees of Kshs. 35,477,649.00** 1. The Tribunal observes that the original basis of this disallowance, being the Appellant's failure to deduct withholding tax on the subcontractor fees, is not, without more, a basis known to the ITA for disallowing an expense. The remedy for a failure to withhold tax lies in the recovery of the unremitted withholding tax together with the attendant penalties and interest from the payer, and not in the disallowance of an otherwise deductible expense. Had the matter rested there, the Appellant's complaint would have carried force. 2. The matter did not, however, rest there. At the objection stage, the Respondent interrogated the deductibility of the expense itself under Section 15 of the ITA and requested the invoices, proof of payment and the expense ledger. The Appellant provided the invoices only; the general ledger and proof of payment were never submitted, whether to the Respondent or to this Tribunal. 3. An expense is deductible under Section 15(1) of the ITA only where it is shown to have been wholly and exclusively incurred in the production of income, and it is the taxpayer who must demonstrate, with documentation, that the expense was in fact incurred. Invoices alone evidence a demand for payment; they do not evidence payment or incurrence. In the absence of the proof of payment and ledger entries, the deduction was not substantiated, and the Tribunal finds that the disallowance was properly sustained on that footing. **(iv) The VAT variance of Kshs. 649,677,947.00 for the year 2022** 1. The Appellant's explanation for this variance was that the WHVAT certificates issued by the National Irrigation Authority related to a zero-rated project which it took over from Afrikon Company Ltd by a Deed of Assignment dated 27th August 2021, such that the withholding of VAT on those supplies was erroneous. 2. A claim that supplies are zero-rated or exempt is a claim to a preferential tax status, and the taxpayer asserting it must strictly demonstrate that the supplies fall within the statutory instrument conferring that status, and must link the specific supplies to the certificates said to be erroneous. The Appellant provided a copy of the contract and the Deed of Assignment, but did not submit the supporting invoices or demonstrate a linkage between the invoiced transactions and the WHVAT certificates. 3. It provided no evidence of the VAT (Exemption) Order, 2018 gazette entry applicable to the Bura Irrigation Project, nor of any action taken to correct the alleged error, such as a formal request to the National Irrigation Authority or to the Respondent for the cancellation or amendment of the erroneously issued certificates. Most tellingly, it is not disputed that the Appellant claimed and benefited from the WHVAT credits issued by the National Irrigation Authority, conduct that is irreconcilable with its assertion that the withholdings were erroneous. 4. A taxpayer cannot approbate and reprobate: it cannot enjoy the credits arising from withholding certificates while simultaneously disowning the sales that generated them. The Tribunal accordingly finds that the confirmation of the VAT variance for 2022 was justified. **(v) The PAYE assessment on direct labour** 1. The PAYE assessment arose from variances between the salaries and wages claimed as expenses in the Appellant's income tax returns and the emoluments declared in its PAYE returns for the years 2020 to 2023. 2. The Appellant's explanation, that the variances comprised wages paid to casual workers earning below the PAYE threshold, is one that is capable of verification, and the Respondent identified with precision the documents required to verify it: month-by-month payroll breakdowns demarcating employees subjected to PAYE from those below the threshold, summaries of the casual workers including their identification and telephone particulars, sign-out schedules, and evidence of payment through bank statements or the cashbook. 3. The Appellant provided Excel schedules showing the breakdown of the casual workers and the amounts paid, but the evidence of actual payment, requested in the Respondent's email of 27th August 2025, was never furnished, and sign-out schedules were availed for only one week, being week 9 of 2020, out of a four-year audit period. 4. The muster rolls, transfer records and mobile money or bank confirmations which the Appellant's own pleadings assert are available for verification were not placed before this Tribunal either. A schedule prepared by a taxpayer is, without the underlying payment evidence, no more than a reformulated assertion; it is not the competent and relevant evidence which, per the **Trical and Hard case (supra)**, shifts the burden to the Commissioner. 5. As for the alleged arithmetical errors, the record shows that the Respondent verified the computations at the objection stage and corrected the errors it found, reducing the PAYE principal tax from Kshs. 235,117,595.00 to Kshs. 228,569,459.39. The Appellant did not demonstrate, by any computation placed before the Tribunal, that further errors persisted, or that the 2023 direct labour figure was Kshs. 74,049,041.90 or the total payroll Kshs. 92,290,878.00 as it variously asserted. The Tribunal therefore finds no basis to interfere with the PAYE assessment as revised in the objection decision. 6. Finally, the Appellant's apprehension that withholding tax credits were not netted off is not borne out by the record. The Tribunal notes that the objection decision expressly deducted withholding income tax credits, advance tax credits and tax credits in arriving at the Corporation tax due for each year. No double taxation was demonstrated. 7. The upshot of the foregoing is that whereas the Respondent allowed every item that the Appellant supported with documentation, the Appellant failed to tender the evidence necessary to dislodge the remainder, both at the objection stage and before this Tribunal. 8. Consequently, the Tribunal finds that the presumption of correctness attaching to the confirmed assessments therefore remains undisturbed, and the Appellant failed to discharge its burden under Section 56(1) of the TPA and Section 30 of the Tax Appeals Tribunal Act, and thus the Tribunal finds that the Respondent was justified in confirming the assessments in the objection decision dated 2nd October 2025. **FINAL DECISION** 1. The upshot to the foregoing analysis is that the Appeal is not merited, and accordingly, the Tribunal proceeds to issue the following Orders: a) The Appeal be and is hereby dismissed; b) The Respondent's objection decision dated 2nd October 2025 be and is hereby upheld; and c) Each party to bear its own costs. 1. It is so ordered. **DATED AND DELIVERED AT NAIROBI THIS 14TH DAY OF AUGUST 2026.** **……………………………..….** **ROBERT M. MUTUMA** **CHAIRMAN** **……………………………… …………..….……..………..** **GLORIA A. OGAGA DR. TIMOTHY B. VIKIRU MEMBER MEMBER** **……………………………..….** **JIMMY M. MALLA** **MEMBER**