[2024] KETAT 733 (KLR)

Visa Cemea Holdings Limited v Commissioner of Legal Services & Board Coordination (Tax Appeal E148 of 2023) [2024] KETAT 733 (KLR) (Commercial and Tax) (17 May 2024) (Judgment)

Neutral citation: [2024] KETAT 733 (KLR)

Republic of Kenya

In the Tax Appeal Tribunal

Commercial and Tax

Tax Appeal E148 of 2023

E.N Wafula, Chair, E Ng'ang'a, AK Kiprotich, EN Njeru & M Makau, Members

May 17, 2024

Between

Visa Cemea Holdings Limited

Appellant

and

Commissioner of Legal Services & Board Coordination

Respondent

Judgment

Background 1. The Appellant is a Kenyan branch of a foreign company incorporated in the United Kingdom and a registered taxpayer in the Republic of Kenya.

2. The Respondent is a principal officer appointed under and in accordance with Section 13 of the Kenya Revenue Authority Act, the Authority is charged with the responsibility of among others, assessment, collection, accounting, and the general administration of tax revenue on behalf of the Government of Kenya.

3. The Appellant having applied for excess input tax resulting from zero rated supplies for the tax period November 2020 to June 2021, the Respondent conducted an audit under Section 59 of the Tax Procedures Act, 2015 and notified the Appellant of the preliminary findings vide a letter dated 29th September, 2022.

4. Consequently, the Respondent issued the VAT refund audit findings vide a letter dated 14th December, 2022 wherein the refunds claim were disallowed. The Appellant objected to the disallowed refunds claim vide a letter dated 13th January, 2023.

5. The Respondent reviewed the Appellant’s objection together with the supporting documents and issued an objection decision vide a letter dated 6th March, 2023.

6. The Appellant being aggrieved by the Objection decision lodged the Appeal herein vide a Notice of Appeal dated 4th April, 2023.

The Appeal 7. The Appellant filed a Memorandum of Appeal dated and filed on 17th April 2023 raising the following grounds of appeal:a.That the Respondent erred in fact and law in holding that the services provided by the Appellant under the Intercompany Services Agreement were used or consumed in Kenya.b.That the Respondent erred in law in rejecting the Appellant's application for a VAT refund on the supply of zero-rated supplies since the VAT credits were incurred in by the Appellant in furtherance of zero-rated services (exported services) and therefore due and payable to the Appellant as stipulated under Section 17(5) of the VAT Act 2013 and Regulation 8(1) of the VAT regulations 2017. c.That the Respondent erred in law and fact in holding that the Appellant did not make a taxable supply as it was reimbursed costs by the principal and thus was not entitled to a claim of input tax pursuant to Section 13(5) and Section 17(1) of the VAT Act 2013.

Appellant’s Case 8. The Appellant’s case is premised on its Statement of Facts dated and filed on 17th April 2023 and its written submissions dated and filed on 17th October 2023.

9. The Appellant stated that it executed an Intercompany Services Agreement with Visa International Service Association, a company organized under the laws of the State of Delaware, USA. The Agreement took effect on the 1st of October 2020. Under the terms of the Agreement, the Appellant was engaged to provide various services including marketing, business development support and general support services.

10. In light of the Intercompany Agreement, the Appellant stated that it provided various services including client training and technical support, marketing and business advisory services to VISA International Service Association, domiciled in the United States. It is the Appellant’s case that the services were consumed outside Kenya.

11. The Appellant stated that the services having qualified as exported services were zero-rated for the period under review (November 2020 to June 2021) and since the Appellant was making taxable supplies, it was entitled to a claim of excess input tax incurred in making taxable supplies as stipulated under Section 17(1) of the VAT Act, 2013.

12. The Appellant argued that it had accumulated excess input VAT for the period November 2020 to June 2021 and on 23rd March 2022, lodged an application for a refund of Value Added Tax (VAT) amounting to Kshs 30,387,655. 00 for the said period. The Appellant maintained that the VAT refund application was in line with the provision of Section 17(5) (a) and (d) of the VAT Act, 2013 which allows a registered person to lodge a refund of excess input VAT arising from making zero-rated supplies within 24 months of the date the tax becomes due and payable.

13. Upon receipt of the claim, the Respondent carried out an audit, leading to issuance of preliminary findings vide a letter dated 29th September 2022. In the letter, the Respondent claimed that the services offered by the Appellant under the Agreement were consumed in Kenya and should therefore be subject to VAT at the standard rate of 16%.

14. Through a letter dated 17th October 2022, the Appellant stated that the services while performed in Kenya, the ultimate consumer/user of those services was Visa International Service Association a company domiciled in the United States. Consequently, the Respondent issued its audit findings vide a letter dated 14th December 2022 rejecting the Appellant’s claim on the grounds that the services were provided in Kenya and should be subject to VAT at the standard rate pursuant to Section 5 of the VAT Act 2013. The Appellant lodged a notice of objection dated 13th January 2023 which upon consideration, resulted to issuance of the Objection decision on 6th March 2023.

15. The Appellant’s case is that it is a branch of Visa Cemea Holdings Limited- United Kingdom and its principal activity is to provide services including marketing and client liaison services to its related entity, VISA International Service Association, domiciled in the United States. According to the Appellant, in the ordinary course of performance of its services the Appellant purchases services and other utilities such as professional services, stationery, and furniture among other items.

16. The Appellant alleged that for the period under review, it supplied exported services which were zero-rated pursuant to Paragraph 1 of the Second Schedule to the VAT Act 2013 since 2nd September 2013 when the law took effect until June 2021 when the provision was amended by the Finance Act 2021. The Appellant stated that it claimed input tax pursuant to Section 17(1) of the VAT Act, 2013.

17. The Appellant relied on Section 17(5) (a) and (d) of the VAT Act 2013 which provides that, where a registered person has accumulated excess input VAT emanating from furtherance of zero-rated supplies, the Commissioner shall pay the excess tax credits to the registered person, provided that the registered person makes an application for a refund within 24 months from the date the tax became due and payable.

18. The Appellant maintained that the excess input tax credits arose from the making of zero rated supplies which included exportation of services as stipulated under Paragraph 1, Part 1 of the Second Schedule to the VAT Act, 2013 (now repealed). The Appellant alleged that it provided the Respondent with an intercompany services agreement supporting that the services were pr ovided to a consumer located outside Kenya as stipulated under Regulation 13(12)(b) of the VAT Regulations, 2017. The said Regulation provides, interalia, that:-“(1)An exportation shall be a taxable supply—(b)in the case of services, when the taxable supply involves the services being provided to a recipient outside Kenya for use, consumption, or enjoyment outside Kenya irrespective of where the payment is made from.”

19. The Appellant referred to Section 2 of the VAT Act 2013 which defines a “service exported out of Kenya” as “a service provided for use or consumption outside Kenya.” The Appellant stated that according to the service agreement, the consumer of the service was located outside Kenya and that the services provided by the Appellant were for use, consumption or enjoyment outside Kenya since the service recipient is domiciled in the United States irrespective of whether the service is performed in Kenya or not.

20. According to the Appellant, since the terms “use” and “consumption” are not defined by the Act the Appellant relied on the provisions of the Organisation for Economic Co-operation and Development (OECD) International VAT/GST Guidelines 2013 (OECD Guidelines) in determining who is the ultimate beneficiary (consumer) of its services. The Appellant argued that the OECD GST guidelines provides that for consumption tax purposes internationally traded services and intangibles should be taxed according to the rules of the jurisdiction of consumption which is generally referred to as the “destination principle”.

21. According to the Appellant, the OECD GST Guidelines have been relied upon to interpret tax law in Kenya in various case laws including Unilever Kenya Limited v. Commissioner of Income Tax (Income Tax Appeal no.753 of 2003), Commissioner of Domestic Taxes v Total Touch Cargo Holland (ITA no.17 of 2013) and Panalpina Airflo v the Commissioner of Domestic Taxes (ITA no.5 of 2015).

22. The Appellant’s case is that under the VAT neutrality system, exports are zero-rated when consumed by a purchaser outside the exporting country and imports are taxed on the same basis and at the same rate as domestic supplies. To apply the destination principle in the business-to-business context, the OECD Guidelines has also set forth certain simplifying proxies to determine the place of consumption pursuant to which the jurisdiction of consumption is the location of the customer of the services and the identity of the customer is determined by reference to the business agreement.

23. The Appellant cited the case of Coca Cola Central East and West Africa Limited v Commissioner of Domestic Taxes [2020] eKLR where the Court considered the OECD Guidelines and stated as follows:“I do not perceive the question as to who a consumer or user of marketing and promotional services to be as plain as characterized by the Tribunal. It is not contested that an underlying objective of the services is to maintain and grow the value and importance of Coca-Cola brands, and to increase consumption of Coca- Cola products. Ultimately this translates to increased sales by the Bottlers and therefore more uptake of concentrates from Coca-Cola Export. It is of course true that the target audience for those services is the Kenyan public who are either existing or potential buyers of the Coca-Cola drinks. But does that necessarily make the target audience consumers of the promotional and marketing services? And in posing this question, consumption of the soft drink must not be confused with consumption of the services. Indeed, a promotion or marketing activity may not lead to a sale or consumption of the promoted or marketed product.”

24. With respect to services performed under service agreements between local and foreign entities, the Appellant cited the case of Civil Appeal No. ITA E038 of 2020 - Commissioner of Domestic Taxes v Coca Cola Central East and West Africa Ltd, where the High Court stated that in service agreements involving local and foreign entities, the destination principle is key and applies so that even though the service was offered/rendered in Kenya the service would not necessarily be consumed in Kenya, but by the entity that commissioned the contract, depending on the location of the entity commissioning the marketing and promotion services and not the entity that marketed the services or where marketing and promotion took place.

25. According to the Appellant, the Respondent construed Clause 5. 3 of the Agreement on payments to mean that the consideration under the Agreement is a reimbursement of costs incurred on behalf of a principal, thus the Appellant had not made a taxable supply against which it could claim input tax in accordance with Section 13(5) as read together with Section 17(1) of the VAT Act where a mere disbursement would not be considered as taxable supply. The Appellant maintained that it was not a reimbursement of costs but a cost-plus mark-up transfer pricing basis of valuing related party transactions.

26. Whereas the Respondent in its decision noted that this was a VAT matter so transfer pricing issues should not arise, the Appellant stated that its customers are related parties as contemplated under Section 13 (1) (b) of the VAT Act. Consequently, the Appellant stated that it executed service level agreements for the supply of marketing services on a cost-plus markup basis compliant with transfer pricing requirements under Section 18 of the Income Tax Act, Transfer Pricing Rules and Organization for Economic Cooperation and Development (OECD) Guidelines. The Appellant added that all the transactions undertaken pursuant to the Agreements are at arms-length, which fact remains undisputed by the Respondent.

27. The Appellant further relied on the Agreement to argue that the Agreement defines the service fee for the services, that Clause 5. 1 and Exhibit B of the Agreement distinguishes between the service sees and expenses alluded to in Clause 5. 3. The Appellant maintained that the service fees and reimbursement of costs under the Agreement are separate and distinct, and that all the supplies against which the refund of input tax was being claimed wholly related to service fees earned pursuant to Clause 5. 1 as read together with Exhibit B of the Agreement.

28. The Appellant averred that the services were consumed outside Kenya by Visa International Service Association irrespective of the fact that they are performed in Kenya therefore the services qualified as exported services, thus zero-rated for VAT purposes for the period under review. The Appellant maintained that it rightfully accumulated input tax credits in respect of making zero-rated supplies and that it was entitled to a VAT refund pursuant to Section 17(5) of the VAT Act.

29. The Appellant submitted that it claimed input tax incurred in making taxable supplies pursuant to the provisions of Section 17(1) of the VAT Act 2013. Further as relates to the refund of input VAT, the Appellant relied on Section 17(5)(a) of the VAT Act 2013 which provides that:-“where the amount of input tax that may be deducted by a registered person under subsection (1) in respect of a tax period exceeds the amount of output tax due for the period, the amount of the excess shall be carried forward as input tax deductible in the next tax period: provided that any such excess shall be paid to the registered person by the Commissioner.”

30. The Appellant submitted that the services it offered qualified as exported services were zero-rated for the period under review and that since the Appellant was making taxable supplies (regardless of whether the taxable supplies were zero rated or standard rated), it was entitled to claim of excess input tax incurred in making taxable supplies under section 17(1) of the VAT Act, 2013.

31. In support of its case, the Appellant relied on various decided cases laws including:i.Commissioner of Domestic Taxes v 3M Kenya Limited (Civil Appeal ITA E096 of 2021) [2022] KEHC 12353 (KLR) (Commercial and Tax);ii.Unilever Kenya Limited v. Commissioner of Income Tax (Income Tax Appeal no. 753 of 2003);iii.Commissioner of Domestic Taxes v Total Touch Cargo Holland (ITA no.17 of 2013);iv.Panalpina Airflo v the Commissioner of Domestic Taxes (ITA no.5 of 2015);v.Coca-Cola Central East and West Africa limited versus Commissioner of Domestic Taxes [2020] eKLR;vi.Civil Appeal No. ITA E038 of 2020 - Commissioner of Domestic Taxes v Coca Cola Central East and West Africa Ltd; andvii.Kenya Revenue Authority v Republic (Ex parte Fintel Limited) NRB CA Civil Appeal No 311 of 2013 [2019] eKLR.

Appellant’s Prayers 32. The Appellant prayed for the following orders, that:a.The objection decision issued on 16th March 2023 be set aside;b.The Appeal be allowed;c.The Appellant's application for refund of VAT amounting to Kshs 30,387,655 be allowed and processed; andd.Costs of and incidental to this Appeal be awarded to the Appellant.

Respondent’s Case 33. In opposition to the Appeal, the Respondent filed its Statement of Facts dated and filed on 15th May 2023 and its written submissions dated 9th November 2023 and filed on 10th November 2023.

34. The Respondent averred that the Appellant’s principal activities which were in the nature of client technical support, gathering market intelligence, advertising and marketing services, business development and client relationship services, risk management services were all services provided and consumed in Kenya.

35. The Respondent stated that from the contract provided it was established that the consumer of the services is Visa- USA a company resident in the United States of America. The services provided are listed in Exhibit A of the contract and the same are provided in Kenya by the Appellant.

36. The Respondent stated that from the review of the contract and the customers (Banks) being served by Visa- USA it was evident that the place of consumption was Kenya as Visa USA was securing its business interests within the Kenyan market this meant that the services are consumed in Kenya to enable it serve its Kenyan customers.

37. According to the Respondent, the branch in Kenya performs the services in Kenya for its USA related entity who have resident customers in Kenya.

38. The Respondent contended that it was erroneous to determine the place of consumption based on residency of the person contracting yet a non-resident can consume a service in Kenya if the same is performed in Kenya.

39. According to the Respondent, a review of the business arrangement not just for the branch and the USA entity but also the USA entity with the local customers it serves, it was clear that the services are provided to the USA entity for consumption in Kenya to enable it continue earning income in Kenya.

40. The Respondent averred that the VAT refund application was rejected because there were no exported services. The Respondent further stated that the Appellant did not provide the invoices at the objection stage so that it could be established whether the costs were incurred as a reimbursement or incurred by the branch as a principal.

41. It was the Respondent’s case that there was a provision of taxable services by the branch as the services were consumed in Kenya. The question as to whether VAT was chargeable at 16% or 0% was based on whether the services were exported. The Respondent argued that in determining whether the services were consumed in Kenya the Respondent looked over and above the residency status of the parties who signed the contract.

42. The Respondent averred that it had at all times maintained that there was a taxable supply which attracted VAT at 16% but the Appellant charged VAT at 0%. According to the Respondent, the Appellant opted to charge VAT at 0% and claim for a refund instead of charging VAT at 16% and claim input. Therefore, the Respondent maintained that the objection decision dated 6th March 2023 was proper in law.

43. The Respondent relied on Regulation 13(1)(b) of the VAT regulations 2017 to submit that for a service to be termed as exported it must be used, consumed or enjoyed outside Kenya. The Respondent relied on Tax Appeals Tribunal No.11 of 2013 Coca Cola Central East & West Africa Limited v Commissioner of Domestic Taxes where the Tribunal stated that: “to consume means to “use up” while use means “to put to a particular purpose,” “to take up something.” The Tribunal further stated “Consumption or use of a service is not determined by reference to the payer of the service or location of the payer of the service or location of the person who is requisitioning for the service. What is pertinent is the location of the consumer.”

44. The Respondent submitted that Paragraph 13(1)(b) of the VAT Regulations, 2017 states that,“Provided that the exportation of services shall not include taxable services provided in Kenya but paid for by a person who is not a resident in Kenya.”

45. The Respondent submitted that the services offered by the Appellant as per the Intercompany Services Agreement dated 19th July, 2021 are consumed by the local market in Kenya.

46. The Respondent referred to F.H. Services Kenya Limited —Vs- Commissioner Of Domestic Taxes Tribunal No. 6 of 2012 where the Tribunal stated as follows:-“To our mind then, it is immaterial where the place of the performance of the service takes place, it can be in China, in Latin America, in Ireland, in Mesopotamia, in Asia or Europe or even here in Kenya; what is material is where the use or consumption of the service takes place, not the place of services”

47. The Respondent also referred to Commissioner Of Domestic Taxes v Total Touch Cargo Holland [2018] eKLR wherein the High Court stated as follows:-“I am in full agreement with the above finding by the tribunal. The location where the service is provided does not determine the question of whether the service is exported or not. The test is the location (or place) of use or consumption of that service. Therefore the relevant factor is the location of the consumer of the service and not the place where the service is performed. In this case the service provided by KAHL was for use and consumption in Europe.”

48. The Respondent submitted that under Section 5 of the Intercompany Services Agreement dated 19th July, 2021 the Appellant was reimbursed the costs incurred on behalf of the principal. The Respondent submitted that the Appellant was reimbursed the core expenses therefore it cannot claim input VAT for cost of its principal contrary to Section 13 (5) of the VAT Act, 2013.

49. To illustrated a principal- agency relationship, the Respondent relied on Commissioner of Domestic Services v Dutch Flower Group Kenya (Income Tax Appeal E101 of 2020) [2021] KEHC 23 (KLR). The Respondent also relied on High Court decision in Commissioner of Domestic Services v Dutch Flower Group Kenya (supra) to submit that where there is a principal-agency relationship like in an instant case the agent cannot claim input VAT for a cost incurred by its principal.

Respondent’s prayers 50. The Respondent prayed for the Tribunal to find as follows:a.That the objection decision dated 6th March, 2023 is proper in law and the same should be upheld.b.That the Appeal lacks merit and the same be dismissed with costs to the Respondent.

Issues for Determination 51. The Tribunal having evaluated the pleadings and submissions of the parties is of the view that there are two issues that call for its determination:a.Whether the Intercompany Services Agreement between the Visa Cemea (service provider) and Visa International Service Association (service recipient) was duly in forced for tax purposesb.Whether the Appellant supplied exported services which were zero-rated

Analysis and Findings 52. The Tribunal having identified the issues falling for determination proceeds to analyse the same separately as hereunder.

a.Whether the intercompany services between the Visa Cemea (service provider) and Visa International Service Association (service recipient) was duly in force for tax purposes 53. The Tribunal has on several occasions held that the recipient being outside Kenya is not sufficient, the customer who receives exported services from Kenya should be legally connected to the service provider such as through a business agreement. Further, Guideline 3. 3 of the OECD provides that “the identity of the customer is normally determined by reference to the business agreement.” The Guidelines provide for elements of the business agreement that are:- “Business agreements consist of the elements that identify the parties to a supply and the rights and obligations with respect to that supply. They are generally based on mutual understanding.”

54. Therefore, apart from establishing that the services were issued to a customer outside Kenya, the taxpayer has a burden to demonstrate that there exists a legal agreement for supply of exported services.

55. In the instant Appeal, the Appellant adduced in evidence an Intercompany Services Agreement. The Tribunal took time to examine the Agreement and made inferences therefrom. The Tribunal identified the following facts:i.The Agreement identifies Visa International Service Association as the recipient of the supply;ii.The Agreement states as follows: ‘‘this intercompany Service Agreement is made effective as of October 1, 2020. ’’iii.At execution, the contract states as follows: ‘in witness whereof, the parties have caused this agreement to be executed by their duly authorized representatives effective as of the Commencement Date.’iv.The parties signed the Agreement on 19th July 2021.

56. From the foregoing analysis, the Agreement stated that it was effective as of 1st October 2020 yet the Agreement was signed on 19th July 2021. The Agreement purports to ratify acts done before execution of the Agreement. In light of the assessments, the Appellant stated that it claimed excess input taxes incurred from November 2020 to June 2021. The Tribunal is of the view that the contract only came into effect on 19th July 2021 therefore making the Appellant’s claim void.

57. The Tribunal finds that the Intercompany Services Agreement was invalid and not duly enforced since the Agreement was signed on 19th July 2021 yet the tax claim runs from November 2020 to June 2021. The Tribunal therefore finds that the purported exports, if any, were done outside the contractual period therefore the Tribunal finds that the Intercompany Services Agreement between the Visa Cemea (service provider) and Visa International Service Association (service recipient) was not duly in force for tax purposes.

b. Whether the Appellant supplied exported services which were zero-rated 58. Section 2 of the VAT Act with regards to export of services provides as follows: "service exported out of Kenya" means a service provided for use or consumption outside Kenya.’’

59. On the other hand, Regulation 13 (1)(b) of the Value Added Tax Regulations as revised in 2022 provides as follows:-“(1)An exportation shall be a taxable supply— in the case of services, when the taxable supply involves the services being provided to a recipient outside Kenya for use, consumption, or enjoyment outside Kenya irrespective of where the payment is made from:Provided that the exportation of services shall not include—a.Taxable services consumed on exportation of goods unless the services are in relation to transportation of goods which terminates outside Kenya.”

60. From Section 2 of the VAT Act and Regulation 13 (1) (b) the Value Added Tax Regulations as revised in 2022, it is clear that the applicable test is the location a recipient of the services. The recipient has to be outside Kenya.

61. The parties herein have referred to the provisions of Organisation for Economic Co-operation and Development (OECD) Guidelines as applicable in Kenya on grounds that they form part of international good practices. The Court in Unilever Kenya Ltd v Commissioner of Income Tax [2005] eKLR stated as follows with regards to application of OECD Guidelines:“We live in what is now referred to as a “global village”. We cannot overlook or sideline what has come out of the wisdom of tax payers and tax collectors in other countries. And especially because of the absence of any such guidelines in Kenya, we must look elsewhere. We must be prepared to innovate, and to apply creative solutions based on lessons and best practices available to us. That is indeed how our law will develop and our jurisprudence will be enhanced. And that is also how we shall encourage business to thrive in our country. I have no doubt in my mind that the OECD principles on income and on capital and the relevant guidelines such as “Transfer Pricing” principles, the CUP method adopted for calculations of what ought to be the income, the Cost Plus Return method as well as Resale Minus Method adopted for looking into compliance with arm’s length principles are not just there for relaxed reading.”

62. Guideline 3. 1 of the OECD International VAT/GST Guidelines provides that,“for consumption tax purposes internationally traded services and intangibles should be taxed according to the rules of the jurisdiction of consumption.” On the other hand, Guideline 3. 2 provides that,“for business-to-business supplies, the jurisdiction in which the customer is located has the taxing rights over internationally traded services or intangibles.” It is the Tribunal’s view that these Guidelines are in line with Regulation 13 (1)(b) of the Value Added Tax Regulations as revised in 2022.

63. In understanding the meaning of consumption the Tribunal is guided by the case of Commissioner of Domestic Taxes Versus Total Touch Cargo Holland Income Tax Appeal No. 17 of 2013 while citing the case of FH Services Limited Vs Commissioner of Domestic Taxes.

64. Rule 13(2) of the Value Added Tax Regulations in relation to proof of exports provides as follows:“The Documentation relating to a supply required as the proof of an exportation of goods or services shall be—(a)a copy of the invoice showing the recipient of the supply to be a person outside Kenya;(b)Proof of payment for the supply; and(d)For services, such other documents as the Commissioner may require as proof that the services had been used or consumed outside Kenya.”

65. Rule 5 of the Tax Appeals Tribunal (Procedure) Rules, 2015 provides as hereunder with regard to a Statement of Facts to be filed by the Appellant:-“(1)Statement of fact signed by the appellant shall set out precisely all the facts on which the appeal is based and shall refer specifically to documentary evidence or other evidence which it is proposed to adduce at the hearing of the appeal.”It is the Tribunal’s position that the Appellant has not sufficiently demonstrated in its Statement of Facts the appropriate facts and evidence to attest to the nature of the services rendered on its part.

66. The Tribunal finds that the Appellant has not provided evidence that is required under Rule 13(2) of the Value Added Tax Regulations. Assuming that the impugned Agreement was valid, the Appellant’s claim would not have met the requirements under Rule 13(2) of the Value Added Tax Regulations.

67. The Tribunal finds that the Appellant ought to have annexed invoices and other documents as evidence under Rule 13(2) of the Value Added Tax Regulations but it failed to do so.

68. Consequently, the Tribunal finds that the Appellant failed to discharge its burden of proof as it had failed to demonstrate that it supplied specific exported services which were zero-rated.

Final Decision 69. The upshot to the foregoing analysis is that the Tribunal finds that the Appeal is devoid of any merit and consequently makes the following Orders; -a.The Appeal is hereby dismissedb.The Respondent’s Objection decision dated 6th March, 2024 be and is hereby upheld.c.Each party to bear its own costs.

70. It is so ordered.

DATED AND DELIVERED AT NAIROBI THIS 17THDAY OF MAY, 2024ERIC NYONGESA WAFULA - CHAIRMANEUNICE N. NG’ANG’A - MEMBERABRAHAM K. KIPTROTICH - MEMBERELISHAH N. NJERU - MEMBERMUTISO MAKAU - MEMBER