Loading
“Two Tax Appeals Tribunal decisions reveal why a rejected application to lodge a late objection can become a serious procedural setback for taxpayers”.
A taxpayer may have a compelling argument against a tax assessment and still fail to have that argument heard. In Kenya’s tax dispute-resolution system, the right to challenge an assessment is inseparable from compliance with statutory timelines and procedures. Two decisions of the Tax Appeals Tribunal in May 2026 demonstrate the consequences of seeking to lodge an objection out of time and the importance of choosing the correct remedy when the Kenya Revenue Authority (KRA) rejects that request.
The 30-day deadline and the possibility of an extension.
Section 51(2) of the Tax Procedures Act requires a taxpayer disputing a tax decision to lodge a notice of objection within 30 days of being notified of the decision. However, the law recognises that circumstances may prevent timely compliance.
Under sections 51(6) and 51(7), a taxpayer may apply to the Commissioner for an extension of time. The Commissioner may allow the application where the taxpayer demonstrates that absence from Kenya, sickness or another reasonable cause prevented the objection from being lodged within time, and that the taxpayer did not unreasonably delay in lodging it.
An extension is not automatic. The taxpayer must provide a credible explanation for the delay and sufficient evidence to support the application. But what happens when KRA refuses?
Robert Chukunwe Makokha v KRA: The importance of choosing the right forum.
In Makokha v Kenya Revenue Authority [2026] KETAT 226 (KLR), decided on 19 May 2026, the taxpayer sought to challenge KRA’s rejection of an application for an extension of time to lodge an objection. The underlying dispute concerned additional tax assessments relating to fuel sales that the taxpayer maintained were exempt from VAT.
Rather than determine whether the underlying tax assessment was correct, the Tribunal first considered whether it had jurisdiction to entertain the challenge. It held that a decision rejecting an application under section 51(7) was not an appealable decision before the Tribunal. Relying on Commissioner of Investigations & Enforcement v Vyas t/a Rocon Enterprises [2022] KEHC 16027 (KLR), the Tribunal explained that a taxpayer alleging improper exercise of the Commissioner’s discretion should pursue judicial review before a competent court.
The Tribunal consequently struck out the application for want of jurisdiction, without determining the merits of the underlying tax dispute.
The lesson is clear: a taxpayer cannot simply treat the rejection of a late-objection application as an ordinary tax decision appealable to the Tribunal. The nature of the decision determines the appropriate legal remedy.
Muscom Limited v KRA: When the merits are never reached.
The consequences were similarly evident in Muscom Limited v Kenya Revenue Authority, decided on 15 May 2026.
Muscom sought an extension of time to object to income tax assessments covering the 2017–2020 period. KRA rejected the application, and the company subsequently sought to challenge the assessments. Its arguments included the treatment of commissions earned through its M-Pesa agency network and the distinction between gross commissions received and the amounts it retained as income.
The Tribunal, however, found a fundamental procedural obstacle. Because the late objection had not been admitted, no valid objection and subsequent objection decision existed to ground the appeal. The Tribunal therefore held that it lacked jurisdiction to determine the substantive tax issues and struck out the appeal without deciding whether the assessments were correct.
This is the practical danger of a rejected late objection: the taxpayer’s substantive arguments may remain unheard because the procedural gateway to the Tribunal has not been satisfied.
The decision should not be read as confirming that KRA’s assessments were substantively correct. Rather, the Tribunal’s conclusion was that it could not determine their merits in the absence of the necessary procedural foundation.
What should taxpayers do when KRA says no?
These decisions offer three practical lessons.
First, act promptly. Taxpayers should monitor assessment notifications and observe the 30-day objection period. Where circumstances prevent timely filing, an extension application should be made as soon as reasonably possible, supported by evidence explaining the delay.
Second, challenge the correct decision before the correct forum. Where KRA rejects an application under section 51(7), a taxpayer who believes the decision was unlawful or that the Commissioner improperly exercised discretion should obtain advice on judicial review. Filing an ordinary appeal before the Tribunal may not resolve the problem.
Third, distinguish procedural relief from substantive relief. Challenging KRA’s refusal to extend time is not the same as successfully challenging the assessment itself. Even where a taxpayer obtains relief concerning the refusal, further procedural steps may be required before the underlying tax liability can be contested.
The bottom line
The decisions in Makokha and Muscom underscore a central principle of tax dispute resolution: a strong substantive case does not automatically overcome procedural non-compliance.
For taxpayers, the cost of a missed deadline may extend beyond the inconvenience of delay. A rejected extension application can create a jurisdictional obstacle that prevents the Tribunal from examining the underlying assessment.
In tax disputes, it is not enough to have a case against the assessment. A taxpayer must also preserve the legal route through which that case can be heard.
