High court of Kenya rules that transportation services for goods in transit are subject to VAT and input tax incurred in making exempt supplies is non-deductible

The High court of Kenya, on 8 January 2021, determined that transportation services for goods imported from a foreign place, through the territory of Kenya, to a foreign destination (in transit) are subject to value-added tax (VAT) and that input tax in relation to exempt supplies is not deductible.

The decision follows an assessment by the Kenya Revenue Authority (KRA) that charged VAT on goods in transit, and disallowed input VAT claimed on services offered in relation to goods in transit.

Source EY