Lecture 20 Β· Harley Berry filed nil while its customers reported sales.
π»ππ πͺπππ πΉπππ: A company filed nil VAT returns while its customers' withholding VAT certificates showed it was trading, and claimed input tax from suppliers who had declared far less. Asked for invoices, it asked instead for a flat 40% allowance. The Tribunal upheld KSh 317.9m.
Precursor
The case
On 26 March 2025 KRA assessed Harley Berry Limited KSh 317,909,009 in additional VAT for 2022 to 2024. The company had filed nil returns for January to July 2022 although withholding VAT credits sat in the system against its PIN. When it filed amended returns in November 2023, it still did not declare the sales those credits represented.
On the input side, KRA found claims against suppliers who were nil filers, non-filers or not registered for VAT when the claims were made. In some cases Harley Berry had claimed more input tax from a single supplier than that supplier had declared in total sales.
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