- Kenya’s Tax Appeals Tribunal has ruled that the Kenya Revenue Authority (KRA) cannot use Debit Adjustment Vouchers (DAVs) to deny VAT credits during ongoing tax disputes.
- The decision prevents KRA from imposing additional costs or recovering taxes before a final decision is made, offering relief to companies facing cash flow disruptions.
- The Tribunal found that issuing DAVs during an objection process is premature and unlawful, and administrative system limitations do not justify illegal practices.
- The ruling is especially significant for businesses in sectors reliant on VAT credits for working capital, such as manufacturing, agriculture, and exports.
- The decision reinforces that tax enforcement should only occur after a tax liability is final and due, not during ongoing disputes.
Source: the-star.co.ke
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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