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Originally published by Kenyanstop
December 11, 2025
17h ago
High Court Shifts VAT and Bank Deposit Risk Back to Taxpayers
The ruling has changed the way businesses claim VAT and account for bank deposits, placing greater responsibility on taxpayers..
✨ Key Highlights
The High Court in Kenya has issued a landmark ruling that shifts the burden of proving tax compliance from the Kenya Revenue Authority (KRA) to taxpayers, impacting VAT claims and the treatment of bank deposits.
- Taxpayers must now prove the existence, competence, and genuine supply of goods or services by their suppliers to justify VAT deductions, even if acting in good faith.
- The ruling overturns the previous reliance on invoices alone for VAT claims, requiring taxpayers to provide additional evidence like delivery notes and transport logs.
- Unexplained bank deposits are now presumed to be taxable income unless taxpayers provide clear, documented proof otherwise.
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