On 21 March 2025, the Court of Appeal issued a ruling in favor of the Kenya Revenue Authority in Civil Appeal No. 65 of 2019 against David Mwangi Ndegwa (“Mr Ndegwa”). The Court of Appeal set aside an earlier High Court decision which held that VAT is not payable on the sale of land, including buildings, whether residential or commercial. The Court of Appeal determined that the KRA lawfully levied VAT on the sale of commercial property and that the High Court erred in ordering a VAT refund to Mr Ndegwa.
The Court of Appeal found that the VAT Act clearly distinguishes the VAT treatment of the sale of land, residential and commercial property respectively.