KRA loses Sh11 million tax claim case against NGO

The tribunal noted that the fact BGF was a signatory to the funds used to buy the seedlings and this does not entitle them to full and complete ownership of the trees.

The tribunal noted that KRA said BGF had agreed to pay the said amounts and had even requested a payment plan for the same but there was no evidence tabled to that effect.

In the end, the tribunal found that the money given to BGF by her parent company, Better Glove AS, did not constitute an interest-free loan and allowed their appeal, rejecting KRA's objection.

Aggrieved by this decision, KRA moved to the High Court to challenge it.

In his Judgment, Justice David Majanja said the court was supposed to determine whether the money sent to BGF from Better Globe AS was interest-free loans and whether they should be subjected to pay withholding tax.

Justice Majanja said KRA was correct in requiring BGF to prove the funds were not a loan but a customer remittance, and that the company did so on multiple occasions.

"I am unable to find fault in the tribunal's conclusion that the remittances made by the respondent to Better Globe AS were not loans attracting deemed interest but remittances from Better Globe AS's investors who got a Return on Investment from the said remittances," said Justice Majanja.

He added: "The tribunal's overall conclusion was thus sound and I do not find any reason to intervene."