Tribunal Declines Jurisdiction Over Late-Filed Tax Appeal

Parties to the case: Dr. Sergon Kibet vs. Commissioner of Domestic Taxes

Court jurisdiction: Tax Appeal Tribunal, 2025

1. Background & Facts of the Case

The Appellant taxpayer, an employee of the World Health Organization (WHO), challenged an income tax assessment issued by the Kenya Revenue Authority (KRA). The assessment covered income tax for the years 2018–2020, amounting to KES 39,799,180. He objected, arguing that his salary and emoluments from WHO were tax-exempt under various international agreements, including the Convention on Privileges and Immunities of the United Nations (1946) and the Host Country Agreement between the UN and Kenya.

KRA rejected the objection and issued an objection decision demanding KES 35,909,292 on September 11, 2023. Aggrieved by this decision, the Appellant taxpayer filed a Notice of Appeal to the Tax Appeals Tribunal (TAT) on February 28, 2024, being over 120 days after the expiry of the 30 day statutory deadline and without seeking leave of the Tribunal to be allowed to file the appeal out of time.

2. Tax Issues in Dispute

• Whether the Appellant’s income from WHO was exempt from taxation under international agreements and Kenyan law.
• Whether the Tax Appeals Tribunal (TAT) had jurisdiction to hear the appeal given that it was filed late without seeking an extension.

3. Arguments by Both Parties

Appellant:

• Claimed his salary was tax-exempt under the Privileges and Immunities Act, the Vienna Convention on Diplomatic Relations, and the Host Country Agreement between the UN and Kenya.
• Argued that he was not locally recruited, as evidenced by his appointment letter from Harare, Zimbabwe.

Respondent (KRA):

• Asserted that Kenyan tax law (Income Tax Act) subjects the worldwide income of a Kenyan tax resident to taxation.
• Cited Section 3(2) and Section 5(2)(a) of the Income Tax Act, which classify wages, salary, and other emoluments as taxable income, regardless of where the employment services were rendered.
• Contended that the Appellant failed to provide sufficient evidence to justify his claim for tax exemption.

4. Court Decision

• The Tribunal dismissed the appeal for being filed out of time without getting authorization to file a late appeal by the Tribunal.
• It ruled that the Notice of Appeal should have been filed by October 11, 2023, but was instead filed on February 28, 2024.
• The Tribunal in holding that it did not have jurisdiction to hear the appeal relied on the celebrated decision in Motor Vessel “Lilian S” v. Caltex Oil (K) Ltd (1989) eKLR, emphasizing that jurisdiction is fundamental, and without it, the Tribunal could not proceed with the case.

5. Implication of the Ruling

• Strict adherence to appeal timelines: Taxpayers must file appeals within 30 days of an objection decision or seek an extension within reasonable time, as failure to do so results in automatic dismissal.
• Jurisdictional limitations of TAT: The Tribunal cannot hear a case filed outside statutory timelines meaning the case will be dismissed on a procedural technicality without consideration of the merits of the case.
• Application for leave to file a late appeal: taxpayers are allowed to file an application to the Tribunal to be allowed to file a late appeal where they have justifiable grounds for not filing on time.