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Kenya Revenue Authority’s (KRA) appeal to set aside a Tax Appeals Tribunal (TAT) decision on the authority’s demands on Golf and Sport clubs has been thrown out by the High Court, dealing a blow to the taxman.

KRA Commissioner in charge of Domestic Taxes made the appeal to the High Court against Sigona Golf club, Thika Golf club, Kiambu Golf club, Ruiru Golf club and Kenya Golf Federation to dispute their objections to the VAT demands they made on membership entrance fees and members subscription fees.

Golf clubs and Sports clubs in Kenya had enjoyed and continued VAT exemption on membership entrance fees and members subscription fees until the year 2017, when the tax authority started demanding VAT on those fees.

The clubs, after the tax demands, filed for their respective objections which were overruled by the tax authority thereby prompting the clubs to file appeals in the Tax Appeals Tribunal.

On March 27, 2020, the tribunal, in its judgement, upheld the clubs’ objections and set aside the impugned Tax Demands by the tax authority and objection decisions.

Dissatisfied with the tribunal’s judgement, KRA filed appeals to the High Court of Kenya at Nairobi Commercial and Tax Division seeking to set aside the said judgement and substitute it with a judgement dismissing those appeals, and upholding their tax demands and objection decisions.

Similar facts deduced

The court, having gone through the appeals, established that the appeals were of common strain and similar facts hence they were consolidated and proceeded together. On July 11 2024, judge Nixon Sifuna delivered his judgment on the dispute therefore announcing KRA’s loss to the clubs.

“I find no merit in the appellant’s appeal, hence hereby dismissing them accordingly,” Judge Sifuna announced.

He explained that the consolidated judgment delivered on March 27, 2020 by the TAT was upheld, with the consequence that the joining fee and member subscription fee of golf clubs and sport clubs were exempt from VAT.

Sifuna advised that just as was the costs in the Tribunal, each party was to bear its own costs of the appeals.