1 September 2026
Tax disputes are governed by strict statutory timelines. Missing a filing deadline can have significant consequences, including the loss of a taxpayer’s right to challenge an adverse tax decision. However, Kenyan law recognises that not every delay is deliberate or inexcusable. In appropriate circumstances, the Tax Appeals Tribunal (TAT) has discretion to allow a taxpayer to file an appeal out of time where the interests of justice demand.
A recent decision of the Tax Appeals Tribunal in Joys and Holdings Limited v Kenya Revenue Authority (Tax Appeal E046 of 2026) offers useful guidance on when that discretion may be exercised. The ruling reinforces that while statutory timelines are important, they should not be applied so rigidly as to deny deserving taxpayers the opportunity to have genuine disputes determined on their merits.
The Statutory Framework
Section 13(1) of the Tax Appeals Tribunal Act, 2013, requires a taxpayer to file a Notice of Appeal within thirty days after being notified of the Commissioner’s objection decision. Failure to comply with that timeline does not necessarily bring the matter to an end.
Under Section 13(3) of the Tax Appeals Tribunal Act, the Tribunal has discretion, upon application, to extend time for filing an appeal. That discretion is, however, qualified by Section 13(4), which provides that an extension may only be granted where the delay arose due to absence from Kenya, sickness, or “other reasonable cause.”
The phrase “other reasonable cause” is not defined and the Legislators left it to the Tribunal to evaluate each application on its own facts and determine whether the explanation offered justifies the exercise of its discretion.
Extension of time is a discretionary remedy
One of the most important principles reaffirmed in the Joys and Holdings decision is that an extension of time is not a right. Guiding principles applicable to applications for extension of time include whether the delay has been satisfactorily explained, whether the application was brought without undue delay, whether the intended appeal is arguable, whether the respondent will suffer prejudice, and whether the circumstances justify the exercise of judicial discretion..
What Amounts to “Reasonable Cause”?
The central issue in most applications is whether the taxpayer has demonstrated a reasonable explanation for the delay.
In Joys and Holdings, the taxpayer explained that after receiving the objection decision, it engaged the Kenya Revenue Authority in genuine negotiations aimed at resolving the dispute amicably. Those discussions created a legitimate expectation that litigation might not be necessary. At the same time, the taxpayer was dealing with a technically complex assessment involving VAT, withholding tax and allowable expenses, while also experiencing administrative and system-related difficulties in accessing supporting financial records.
The Tribunal accepted these explanations as constituting “other reasonable cause” under Section 13(4), particularly because KRA did not file any response challenging the factual assertions made by the taxpayer.
The decision demonstrates that “reasonable cause” extends beyond illness or absence from Kenya. Commercial realities such as genuine settlement negotiations, complexity of tax reconciliations and practical administrative constraints may, in appropriate cases, justify an extension of time.
An Arguable Appeal Is Equally Important
A satisfactory explanation for delay alone is insufficient.The Tribunal must also be satisfied that the intended appeal raises genuine issues deserving judicial consideration. The applicant need not demonstrate that the appeal will ultimately succeed. Rather, it must show that the appeal is not frivolous.
In the Joys and Holdings case, the draft Memorandum of Appeal alleged, among other things, double taxation, erroneous disallowance of expenses and a failure by KRA to appreciate timing differences between VAT and income tax reporting. The Tribunal found these issues sufficiently arguable to justify allowing the matter to proceed.
Delay Must Be Explained
The length of the delay is not, by itself, decisive.Even a relatively lengthy delay may be excused if properly explained. Conversely, a short delay accompanied by no credible explanation may lead to dismissal of the application.
Although approximately six months had elapsed in Joys and Holdings, the Tribunal accepted that the delay was sufficiently explained by the taxpayer’s ongoing engagement with KRA and the surrounding circumstances.
Will the Commissioner Be Prejudiced?
Another important consideration is whether granting leave would unfairly prejudice the Commissioner.
In many tax disputes, allowing an appeal to proceed merely gives the taxpayer an opportunity to be heard. Should the appeal ultimately fail, KRA remains entitled to recover the assessed taxes together with any applicable interest and penalties.
In Joys and Holdings, the Tribunal observed that KRA had not opposed the application and had not demonstrated any prejudice it would suffer if time were enlarged. On the contrary, denying the application would have permanently shut the taxpayer out from challenging the assessment. In those circumstances, the balance of justice favoured granting leave.
Practical Lessons for Taxpayers
The decision offers several practical lessons for taxpayers and tax practitioners. First, statutory timelines should always be treated seriously, and appeals should be lodged promptly wherever possible. Secondly, where a deadline has been missed, taxpayers should act without further delay and place before the Tribunal a detailed affidavit explaining the reasons for the delay, supported by documentary evidence where available. Thirdly, any application for extension of time should demonstrate that the intended appeal raises bona fide legal or factual issues deserving determination.
Finally, taxpayers should avoid assuming that ongoing negotiations with KRA automatically suspend statutory timelines. Unless an extension is granted by the Tribunal, the statutory filing deadlines remain in force.