The Kenya Revenue Authority (KRA) has won a landmark Sh35.9 million tax case against WHO epidemiologist Dr. Kibet Sergon, establishing a precedent that could impact many Kenyans working for diplomatic organizations. The dispute stemmed from four property acquisitions (2018-2021), with KRA demanding evidence that purchases were made using his tax-exempt UN salary.
Failure to provide bank statements led KRA to classify the funds as undeclared taxable income despite his PAYE exemption.
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The dispute escalated when KRA scrutinized Dr. Sergon’s records between 2018 and 2021, noting his pattern of paying stamp duty while filing nil returns based on UN employee tax exemptions. Despite Dr. Sergon’s objection citing his fixed-term UN contract status and recruitment in Zimbabwe, KRA maintained its position that without proper documentation such as bank statements and payment evidence, the property purchases would be classified as acquisitions from undeclared, taxable income.
The case’s outcome, following Dr. Sergon’s failure to file a timely appeal to the Tax Appeals Tribunal, potentially opens the door for KRA to scrutinize similar cases involving diplomatic organization employees who have made investments while claiming tax exemptions.
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