The relevant case study
A recent judgment by the High court in, Commissioner of Investigation & Enforcement v Hanqing Zhao (Income Tax Appeal E010 of 2025) delivered on October 27, 2025,clarifies an objection to a tax assessment must likewise be lodged through the iTax system to acquire legal validity.
Background
Hanqing Zhao (Respondent) is an individual taxpayer dealing in general supplies. Kenya Revenue Authority “(KRA”) (Appellant) issued a Notice of Tax Assessment for the period 2018 to 2023 for taxes totaling Kshs. 1,136,144,299.00. Hanqing Zhao, objected through a physical letter dated 29th September 2023, sent to KRA officers through their mail. On 8th November, KRA issued a demand notice for the full amount of the assessed taxes, stating that Hanqing Zhao had not formally filed an objection through the iTax portal. After discussions between the parties and KRA's approval for a late objection, Hanqing Zhao submitted a formal objection through the iTax portal on November 30, 2023.
KRA thereafter issued its Objection Decision, confirming the tax liability, on 29th January 2024, slightly reviewing downwards the tax assessed to Kshs. 1,129,243,870.00.
Dissatisfied with the KRA’s decision, Hanqing Zhao, on 20th February 2024, filed an appeal at the Tax Appeals Tribunal, challenging KRA.
Aggrieved by TAT’s judgment, KRA appealed to the High Court through a memorandum of appeal dated 17th January 2025.
KRA assertions
KRA’s position was that the TAT erred in law:
- In holding that the objection decision dated 29 January 2024 was issued approximately 60 days late.
- In finding that, despite failing to lodge the objection on iTax within time, Hanqing Zhao was not required to seek leave to appeal out of time under section 51(6) of the Tax Procedures Act.
- By failing to consider KRA’s evidence on the actual date the application for late objection was lodged.
- In failing to find that the objection lodged on 30 November 2023 and decided on 29 January 2024 was determined within the statutory 60‑day period.
- In finding that the objection by Hanqing Zhao dated 29 September 2023 was allowed by operation of law due to an alleged failure by KRA to issue a decision within 60 days.
- By failing to determine other issues where the burden of proof lay on Hanqing Zhao to explain banked income.
- By failing to properly consider the evidence and submissions filed by KRA, thereby violating KRA’s right to a fair hearing under Article 50(1) and 50(2) of the Constitution.
Taxpayer assertions
Hanqing Zhao argued that:
- KRA failed to provide the basis for the assessments, contrary to Article 47(1) and (2) of the Constitution, thereby denying him the right to fair administrative action.
- The objection decision issued on 29 January 2024 was rendered outside the statutory 60‑day period prescribed under section 51(11) of the Tax Procedures Act.
- KRA incorrectly acknowledged 30 November 2023 as the objection date, whereas the VAT objection was lodged on 29 September 2023.
- He was assessed for VAT despite not being registered, without KRA first invoking section 34(6) of the VAT Act on compulsory registration.
- He was unable to lodge an objection to the VAT assessment on iTax as the assessment had not been uploaded on the platform.
- KRA failed to consider his workings, explanations, and supporting documentation submitted during the objection process.
- The tax decision is excessive and punitive and poses a risk of adversely affecting his business.
TAT ruling
The TAT originally ruled in favor of Hanqing Zhao. It found the date objection to be 29th September 2023 and not 30th November 2023 as had been argued by KRA. The TAT held that KRA’s Objection decision of 29th January 2024 was issued outside the 60-day period prescribed under section 51(11) of the Tax Procedures Act, with the consequence that the whole of the taxes assessed (Kshs. 1,129,243,870) was set aside.
High Court ruling
The High Court overturned the TAT’s decision and allowed the KRA’s appeal. The Court held that:
- The sixty‑day period under section 51(11) should be reckoned from 30 November 2023, being the date the objection was formally lodged on the iTax platform, as only objections submitted through iTax acquire legal validity, just as assessments not generated through iTax cannot be deemed valid under the law.
Impact on taxpayers
Taxpayers are required to lodge all objections solely through the iTax platform within 30 working days to start KRA's 60-day response period, making physical letters or emails of no legal effect.
Non-compliance with iTax filing heightens risks of objection dismissal, immediate demand notices, and forfeiture of automatic tax relief if KRA's delayed response is calculated from an invalid starting date.
Conclusion
The case at the High Court establishes that a valid objection notice is valid only if lodged through the iTax platform, overriding informal submissions like physical letters. This procedural requirement ensures precise timelines under Section 51 of the Tax Procedures Act for KRA's 60-day response obligation. Taxpayers benefit from clarity on digital compliance but must prioritize timely iTax access to safeguard appeal rights.
While this is a welcome move, practically, we note that there are instances where KRA issues a notice of assessment to the taxpayer via a letter while the assessment has not yet been raised on iTax, making it impossible for a taxpayer to lodge the objection on iTax. With the ruling issued we note that taxpayers will now be forced to confirm that the assessments have been raised on iTax in order for their objections to be deemed validly lodged.