Doshi Enterprises has secured partial relief after a long-running tax battle moved between the Tribunal and High Court.
The Tax Appeals Tribunal has set aside part of a KSh73.67 million tax demand against Doshi Enterprises Limited.
The Tribunal found KRA unlawfully applied a 30 per cent corporation tax rate during part of 2020.
It also ordered VAT to be recalculated after excluding realised foreign exchange losses.
The ruling, delivered on September 11, 2026, is the latest chapter in litigation dating back several years.
The dispute began with an original KRA assessment worth KSh87.72 million.
Understanding how the figures changed requires tracing the case from its beginning.
Tax Begins
KRA investigated Doshi Enterprises’ declared income covering several years.
The company manufactures steel, electrical, water hardware and telecommunications solutions.
Following those investigations, KRA demanded KSh59.12 million in corporation tax.
It separately demanded KSh28.60 million in VAT. Together, those assessments totalled KSh87.72 million.
Doshi challenged the assessment before the Tax Appeals Tribunal in Tax Appeal 1316 of 2022.
The Tribunal delivered its first judgement on March 22, 2024.
That first ruling went entirely in Doshi’s favour. The Tribunal allowed the appeal and set aside KRA’s objection decision.
KRA then challenged that decision before the High Court. The case became Income Tax Appeal E112 of 2024, heard by Justice Benjamin Musyoki.
Court Reset
On April 8, 2025, the High Court overturned part of the Tribunal’s decision.
However, it did not simply restore KRA’s original KSh87.72 million assessment.
Instead, the High Court sent the dispute back to KRA for reconsideration.
It directed the Commissioner to examine the relevant documents produced before the Tribunal.
The court also ordered KRA to issue a fresh objection decision within 60 days.
That order effectively reopened the assessment while preserving the taxpayer’s right to challenge KRA’s fresh findings.
KRA subsequently reconsidered the material and issued a new objection decision dated June 5, 2025.
This time, the tax demand fell from KSh87.72 million to KSh73.67 million.
Doshi again challenged KRA, creating the appeal that produced the September 2026 judgement.
The company argued that KRA had gone beyond the High Court’s instructions.
The Tribunal disagreed, finding that the High Court had not restricted reconsideration to one transaction.
The Tribunal said the court could have imposed such a restriction expressly but had not done so.
That finding cleared the way for the Tribunal to examine the fresh assessment.
Evidence Battle
Much of the second appeal centred on money entering Doshi Enterprises’ bank accounts.
Doshi argued that KRA had wrongly treated non-revenue deposits as taxable income.
These included loans, transfers, refunds, reversals and related-party transactions.
KRA countered that Doshi had failed to provide sufficient evidence explaining several deposits.
For instance, KRA questioned KSh6.60 million in alleged reversed transactions.
The Tribunal found that Doshi had supplied ledgers rather than adequate bank advice or contra entries.
The same problem emerged with inter-bank transfers.
For 2018, Doshi claimed substantial transfers, but KRA found only KSh12.60 million adequately supported.
Another KSh20 million remained unexplained and was treated as income.
The 2019 figures presented another evidential problem.
KRA accepted documentation supporting KSh936,175.44 paid to director Kumarpal Maganlal.
It rejected the unsupported balance of approximately KSh4.19 million.
For 2019 inter-bank transfers, KRA accepted KSh12.90 million as supported.
It treated another KSh33.10 million as unaccounted for because the supplied statements related to other periods.
The Tribunal ultimately sided with KRA on most of those evidential disputes.
It stressed that taxpayers must explain precisely what their documents establish.
Simply producing large bundles of records does not automatically displace a tax assessment.
Rate Reversed
Doshi nevertheless won a significant point concerning the 2020 corporation tax calculation.
KRA had applied the 30 per cent corporation tax rate throughout the relevant 2020 assessment.
The Tribunal found that rate unlawful for the period beginning April 25, 2020.
Tax legislation temporarily reduced corporation tax for resident companies to 25 per cent during the Covid-19 relief period.
The rate returned to 30 per cent from January 1, 2021.
The Tribunal therefore set aside corporation tax assessed from April 25 to December 31, 2020.
However, it upheld corporation tax covering 2017 through April 24, 2020.
Doshi also won a separate battle over realised foreign exchange losses.
The company had supplied bank statements and RTGS documents relating to dollar transactions worth about KSh60.06 million.
The Tribunal found KRA had not adequately explained why that evidence was disregarded.
It therefore allowed the realised foreign exchange loss and directed KRA to exclude it when recalculating VAT.
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The final position is therefore clearer than the long litigation history suggests.
The original KRA assessment was KSh87.72 million.
The first Tribunal ruling effectively cancelled that assessment.
The High Court then ordered KRA to reconsider the matter.
KRA’s fresh assessment reduced the demand to KSh73.67 million.
The latest Tribunal ruling has now varied that figure again.
It has removed corporation tax for April 25-December 31, 2020, and ordered VAT recalculation after excluding realised forex losses.
The Tribunal did not award costs to either side.
Both parties will therefore bear their own costs as another chapter closes in the Doshi-KRA tax dispute.
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