Lecture 13 Β· Lamnas bought from a supplier who had died in 2021
π»ππ πͺπππ πΉπππ: KRA traced the PIN on a company's purchase invoices to a trader buried two years before the first sale. The company blamed a former accountant. The Tribunal held that a dead man cannot supply goods, and upheld KSh 3.5m.
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The case
KRA's profiling of businesses in the North Rift flagged a sole trader whose iTax record showed under-declared VAT sales for 2023 and 2024 and nil income tax returns. Notices went unanswered, his phone number belonged to someone else, and bank inquiries led nowhere. Investigators eventually traced him to Homa Bay County, where a burial permit and the local chief confirmed that he had died on 19 February 2021.
Someone had kept his PIN alive and used it to issue invoices that let living businesses claim input VAT and deduct expenses. Lamnas Investors Ltd was among the buyers. KRA attributed to it purchases of KSh 9,200,869 from the dead trader for 2023 to 2025, carrying input VAT of KSh 1,472,139. On 2 December 2025 it disallowed both the VAT and the expense, raising KSh 3,478,209 in additional tax.
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Precursor is published by the FinTech Association of Kenya and exercises independent editorial judgement under the Editorial Independence Charter. This article is labelled Precursor Executive Classroom, which marks commercial material. Knowledge on Tax and financial judgement.
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