Kenya Civil Aviation Authority v Commissioner of Domestic Taxes (Tax Appeal 72 of 2016) [2021] KETAT 93 (KLR) (16 April 2021) (Judgment)

Facts

The Kenya Civil Aviation Authority (CAA) was audited for expenses and tax declarations from 2011 to 2014. The CAA was charged with VAT on domestic air navigation services, but the Commissioner of Domestic Taxes (CDT) argued that CAA should not be responsible for VAT on these services.

Issues

1. Whether the Kenya Civil Aviation Authority (CAA) should remit VAT on air navigation services
2. Whether the Kenya Civil Aviation Authority (CAA) has the authority to administer and enforce the provisions of written laws

Reasoning

The Kenya Civil Aviation Authority (CAA) is a regulatory authority established by the Civil Aviation (Amendment) Act, 2002, and its primary functions include regulation and oversight of aviation safety and security. The Kenya Revenue Authority (KRA) is an agency of the Government for the collection and receipt of all revenue. The Kenya Revenue Authority Act, Cap 469 of the Laws of Kenya, mandates the KRA to collect revenue, and the Kenya Civil Aviation Authority (CAA) does not have the authority to administer and enforce the provisions of written laws.

Outcome

The Kenya Civil Aviation Authority (CAA) is not liable for VAT on air navigation services.

Authorities cited