Judgment summary
The Appellant, Al-Khair Foundation, imported consignments of dates classified under HS Code 0804.10.00 during the Ramadhan periods of 2023 and 2024. These were cleared duty-free pursuant to letters from the Cabinet Secretary, National Treasury and Economic Planning, dated 13th March 2023 and 26th January 2024, which undertook that the Government of Kenya would bear the applicable import duty, VAT, IDF and RDL.
More than two years later, the Respondent's Post Clearance Audit Division issued a Notice of Demand dated 27th October 2025 for Kshs. 1,478,355,00, on the basis that the National Treasury had not honoured its undertaking and that liability remained with the Appellant under Section 133 of the EACCMA, 2004. The Respondent relied on Cale Infrastructure Construction Company Ltd v Commissioner of Customs & Border Control & Another (TAT Appeal No. E234 of 2024).
The Appellant filed an Application for Review on 4th November 2025, which the Respondent rejected in a Review Decision dated 24th November 2025, upholding the demand. The Appellant then appealed to the Tribunal by Notice of Appeal dated 31st December 2025.
The Tribunal found that the Cabinet Secretary has no power under the EACCMA to grant exemptions from customs duty, as the EACCMA takes precedence over national administrative measures under Section 253, and the Appellant was not listed in the Fifth Schedule of exempted entities. The Cabinet Secretary's letter was held to be a promise to pay duty on the Appellant's behalf, not a waiver of duty.
However, regarding the Import Declaration Fee and Railway Development Levy, the Tribunal found that the Cabinet Secretary responsible for Finance does have power under the Miscellaneous Fees and Levies Act, Cap. 469C, to grant exemptions in the public interest, and that this power had been lawfully exercised in respect of the imported dates.
Background
The Appellant is a limited liability company incorporated in Kenya (para 1). The Respondent is the principal officer appointed under Section 13 of the Kenya Revenue Authority Act, responsible for collection and administration of tax revenue (para 2).
The Respondent issued a Notice of Demand dated 27th October 2025, to which the Appellant filed an Application for Review on 4th November 2025 (para 3). The Respondent issued its Review Decision on 24th November 2025, upholding the demand for additional taxes. The Appellant then lodged its Notice of Appeal dated 31st December 2025 (para 4).
Core dispute
The central issue was whether letters from the Cabinet Secretary, National Treasury and Economic Planning, dated 13th March 2023 and 26th January 2024, exempted the Appellant from payment of import duty, VAT, IDF and RDL on dates imported during Ramadhan, or whether they merely constituted a promise by the National Treasury to bear those taxes without extinguishing the Appellant's primary statutory liability (paras 43, 48).
The Appellant argued that the exemption was a binding public law fiscal directive implemented through the Respondent's own statutory machinery, distinguishable from the private, project-specific contractual undertaking considered in Cale Infrastructure Construction Company Ltd v Commissioner of Customs & Border Control & Another (TAT Appeal No. E234 of 2024). The Appellant further argued that Section 133 of the EACCMA, 2004 could not be used to retrospectively impose liability where no duty obligation had arisen at the time of entry, and that the demand breached its legitimate expectation and the presumption of regularity of administrative acts (paras 14-27).
The Respondent maintained that the National Treasury letters were merely a promissory note to settle duty on the Appellant's behalf, that this did not transfer or nullify the Appellant's primary tax liability, and that the case fell squarely within the Cale Infrastructure decision (paras 31-36).
Court findings
The Tribunal held that the statutory obligation to pay duties rests with the Appellant as owner of the imported goods, and that under Section 253 of the EACCMA the provisions of the EAC statute take precedence over administrative measures at the national level, including the Cabinet Secretary's letters. The Tribunal found that the Cabinet Secretary does not have power to grant exemptions from customs duty under the EACCMA, and that the Appellant was not listed in the Fifth Schedule of exempted entities (paras 46-47).
The Tribunal found that the Cabinet Secretary's letter did not amount to an exemption from duty but was a promise to pay the duty on behalf of importers of dates during Ramadhan, which is not a waiver within the meaning of tax statutes (para 48).
Regarding the Import Declaration Fee and Railway Development Levy, the Tribunal found that the Miscellaneous Fees and Levies Act, Cap. 469C, grants the Cabinet Secretary responsible for Finance the power to exempt goods in the public interest under the Second Schedule, and that this power had been lawfully exercised in respect of the imported dates (paras 49-50). Accordingly, the Respondent had no basis to assess IDF and RDL on the dates (para 51).
The Tribunal examined Cale Infrastructure Construction Co. Limited v Commissioner of Customs & Border Control (Tax Appeal No. E234 of 2024) and found that, apart from both cases involving exemptions granted subject to conditions, the facts were otherwise dissimilar (para 52). The Tribunal concluded that the Respondent was justified in confirming the import duty assessment but erred in confirming the IDF and RDL assessments (para 53).
Outcome
The Tribunal held that the appeal was partially meritorious. The appeal was partially allowed, and the Review Decision dated 24th November 2025 was varied: the assessment relating to import duty was upheld, while the assessments relating to the Import Declaration Fee and the Railway Development Levy were set aside. Each party was ordered to bear its own costs (para 54).
Major issues / areas of contention
- Whether the Respondent's Review Decision dated 24th November 2025 was proper and justified.
- Whether letters from the Cabinet Secretary, National Treasury, dated 13th March 2023 and 26th January 2024, constituted a lawful exemption from import duty or merely a promise to pay duty on the Appellant's behalf.
- Whether Section 133 of the EACCMA, 2004 could be used to retrospectively impose liability on the Appellant for consignments previously cleared duty-free.
- Whether the Cale Infrastructure Construction Company Ltd decision was properly applicable to the Appellant's circumstances.
- Whether the Cabinet Secretary for National Treasury had power under the EACCMA to grant exemptions from customs duty.
- Whether the Cabinet Secretary responsible for Finance had power under the Miscellaneous Fees and Levies Act, Cap. 469C, to exempt the Import Declaration Fee and Railway Development Levy.