Lecture 22 Β· Yarde Park bought maize from farmers without receipts
π»ππ πͺπππ πΉπππ: A maize trader supplying a flour miller could not produce invoices for much of what it bought from smallholders. KRA disallowed 40% of its purchases and added VAT, for a KSh 593.5m bill. The Tribunal upheld it because the ledgers KRA asked for never arrived.
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The case
Yarde Park Lounge Ltd bought maize from farmers and supplied it to Kingmall Flour Millers. KRA gave notice of an audit of 2020 and 2021 on 16 May 2025. On 23 June it issued findings of KSh 593,481,355 in corporation tax and VAT, with penalties and interest. A large part came from disallowing 40% of purchases unsupported by invoices. Another came from VAT, which the company said could not arise because maize is exempt.
Yarde Park objected on 18 July. Buying from smallholders at harvest made invoices for every purchase almost impossible, it said, and it had declared all its income under a contract with the miller. On 12 August KRA listed what it needed: bank statements, expense ledgers, sales and purchase records, sample invoices and other support. The company sent bank statements, audited accounts and the contract. The ledgers and invoices did not come, and on 15 September KRA confirmed the assessment.
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