The High Court has ruled in favor of Pesapal Limited, overturning a tax tribunal decision and exempting the payment firm's commissions from Value-Added Tax (VAT). This landmark judgment means Pesapal will not have to pay KSh 76.8 million in unpaid VAT and KSh 33.9 million in penalties and interest assessed by the Kenya Revenue Authority (KRA).

• High Court Judge Rhoda Rutto ruled that Pesapal's activities align with VAT-exempt financial services, even when delivered digitally.
• The Kenya Revenue Authority (KRA) had argued that Pesapal was a technology platform, not a financial service provider.
• The ruling affirms that digital payment processors can qualify for VAT exemption, signifying that any future expansion of VAT in this sector would require new legislation.