The Tax Appeals Tribunal has blocked KRA from taxing service charge collections handled by building and estate management companies, ending a four-year dispute with Nextgen Mall Management Company.
KRA had demanded Ksh119.8 million in income tax and VAT, arguing that service charge contributions from property owners were taxable business income.
The Tribunal ruled that the company only acted as a conduit for unit owners, collecting and paying funds for services such as security, cleaning, utilities and repairs.
It found that the money was not the company’s income and that taxing it would amount to double taxation because third-party service providers had already accounted for VAT. KRA can still tax the firm’s own commercial income, including kiosk and stall rentals
