Equator Bottlers Ltd v Commissioner of Domestic Taxes [2024] KETAT 57 (KLR)

Equator Bottlers Ltd v Commissioner of Domestic Taxes (Tax Appeal 1561 of 2022) [2024] KETAT 57 (KLR) (Commercial and Tax) (26 January 2024) (Judgment)

Neutral citation: [2024] KETAT 57 (KLR)

Republic of Kenya

In the Tax Appeal Tribunal

Commercial and Tax

Tax Appeal 1561 of 2022

E.N Wafula, Chair, D.K Ngala, CA Muga, GA Kashindi, AM Diriye & SS Ololchike, Members

January 26, 2024

Between

Equator Bottlers Ltd

Appellant

and

Commissioner of Domestic Taxes

Respondent

Judgment

Background 1. The Appellant is a limited liability company whose principal business is the provision of bottling services for non-alcoholic beverages. It also manufactures plastic bottles and runs soft drinks and mineral water plants.

2. The Respondent is a principal officer appointed under Section 13 of the Kenya Revenue Authority Act Cap 469 laws of Kenya. Under Section 5 (1) of the Act the Respondent is an agency of the Government for the collection and receipt of all tax revenue. Further under Section 5 (2) of the Act with respect to performance of its functions under subsection (1), the Respondent is mandated to administer and enforce all provisions of the written laws as set out in Part 1 & 2 of the First Schedule to the Act for the purposes of assessing, collecting and accounting for all revenue in accordance with those laws.

3. In the accounting period ending December 2018, the Appellant filed and paid Withholding taxes in respect of technical fees and computer charges amounting to Kshs 3,661, 044. 00 and Kshs 3,426,728. 00 respectively. The amounts were withheld from payments made to Coca-Cola Sabco (Pty) Ltd a company resident in South Africa that had offered these services to the Appellant.

4. On 20th May, 2019, the Appellant sought for a refund of these amounts that had been remitted to the Respondent on the ground that it had erroneously withheld and remitted these amounts. It based its assertions on the fact that there existed a Double Taxation Agreement (DTA) between Kenya and South Africa which provides that withholding tax rate was 0%.

5. The Respondent rejected this application for refund through its letter dated 13th October 2021 basing its rejection on the ground that the facts of the transaction brought the payment under the purview of Section 41 (5) of the Income Tax Act which exempts payments made to certain establishments from enjoying benefits of the DTA.

6. The Appellant objected to this rejection vide its letter dated 15th September, 2022.

7. The Respondent then proceeded to issue an objection decision vide its letter dated 10th November, 2022 rejecting the Appellant’s refund application of Kshs 7,087,772. 00 being taxes withheld from payments made for technical fees and computer charges.

8. Aggrieved by the Respondent’s decision, the Appellant filed its Notice of Appeal dated 7th December, 2022 and filed on even date.

The Appeal 9. The Appellant’s grounds of Appeal were stated in its Memorandum of Appeal and Statement of Facts dated 21st December, 2022 and filed on the same date on the premise:a.That the Respondent erred in law and fact by failing to acknowledge the provisions of the Kenya- South Africa Double Taxation Agreement (DTA) which came into force on 1st January 2016. b.That the Respondent erred in law and fact by failing to acknowledge that the Appellant had met the requisite provisions of Section 41(5) and (6) of the Income Tax Act Cap 470 of Kenya’s laws (ITA) as at 2019 and therefore the benefit of exception of the services from withholding tax in Kenya was applicable.c.That the Respondent erred in law by interpreting the provisions of the Income Tax Act in such a way that rendered the provisions and the benefits of the Kenya/South Africa DTA are deemed irrelevant and its objectives defeated.d.That the Respondent erred in law and fact by failing to recognize that there is a non-resident individual or individuals that hold more than 50% of shares in Coca-Cola Sabco (Pty) Ltd.e.That the Respondent erred in law and fact in failing to recognize that an individual means a natural person under the ITA.f.That the Respondent erred in fact and in law in failing to acknowledge that the underlying ownership of Coca-Cola Sabco (Pty) Ltd is the Coca-Cola Company which does not qualify as a natural person as the company is mainly held by institutional investors.g.That the Respondent erred in law and fact by failing to recognize that professional fees paid by the Appellant are business profits under Article 7 (1) of the Kenya-South Africa DTA.h.That the Respondent erred in law by failing to appreciate Treaties form part of the laws of Kenya and the supremacy of DTAs is embodied in the Legislation of Kenya.i.That the Respondent erred in law and fact by failing to appreciate that the Appellant had paid Withholding tax on technical fees and computer charges in error and that the refund is therefore due and payable.j.That the Respondent erred in law in claiming that withholding tax was rightfully deducted under the provisions of Section 35 (1) of the Income Tax Act in respect to technical fees and computer charges paid to Coca-Cola Sabco (Pty) Ltd.

The Appellant’s Case 10. The Appellant argued that Section 2 of the Income Tax Act defines an individual as a natural person and that a natural person is an individual human being as opposed to a legal person. Further that the Blacks Law 4th Edition dictionary defines an individual as:“as single person as distinguished from the group or class, and also, very commonly a private or natural person as distinguished from a partnership, corporation or association.”

11. It contended its position that the underlying ownership of Coca-Cola Sabco (Pty) Ltd is the Coca-Cola Company which does not qualify as a natural person as the company is mainly held by institutional investors. Further that no individual or individuals who are non-residents of South Africa hold more than 50% of the underlying ownership of Coca-Cola Sabco (Pty) Ltd.

12. That the Appellant’s view on a without prejudice basis was that even if the Respondent’s interpretation of Section 41 (6) of the ITA is that the Treaty benefits do not accrue due to the ownership structure, a position the Appellant does not agree with, the decision of the Respondent to limit the application of the DTA renders the main object of the DTA redundant and fails to appreciate the supremacy of the DTA as a source of law in Kenya.

13. The Appellant relied on the preamble of the DTA that states as follows: -“In exercise of the powers conferred by the Section 41 of the Income Tax Act}}, the Cabinet Secretary for Finance declares that the arrangements specified in the Schedule hereto, being arrangements made between the Government of the Republic of Kenya and the Government of South Africa in the articles of an agreement signed on the 26th November, 2010, with a view of affording relief from double taxation in relation to income tax and any rates of similar character imposed by the law of Kenya, shall, notwithstanding anything to the contrary in the Act or any other written law, have effect in relation to income tax under the Act.”

14. The Appellant further averred that an amendment of Section 41 (6) was effected through the Finance Act 2021 which reads as follows:“(2)Subject to subsection (3), where an arrangement made under this section provides that income derived from Kenya is exempt or excluded from tax, or the application of the arrangement results in a reduction in the Kenyan tax, the benefit of that exemption, exclusion, or deduction shall not be available to a person , who for the purposes of the arrangement, is a resident of the other contracting state if fifty percent or more of the underlying ownership of that person is held by a person or persons who are not residents of that other contracting state for the purposes of the agreement”,

15. The Appellant therefore asserted that in light of the above amendment, the Respondent recognizes that the law prior to this change was specific to limiting the Treaty benefit where shareholding was by non-resident individuals or individual who owned more than 50%. With the subsequent amendment the word individual has now been replaced by persons which includes individuals, companies and other entities.

16. The Appellant stated that the amendment effected through the Finance Act 2021 constitutes a Treaty override as the DTA was signed in 2016 and Kenya has an obligation to abide to International Agreements and the same cannot be amended through domestic legislation.

17. The Appellant averred that the management and professional fees paid are provided for in the Kenya-South Africa DTA under Article 7 of the Kenya-South Africa DTA which provides for business profits and that Article 3(2)of the same DTA provides that any term that has not been defined under the DTA shall have the meaning that it has at that time under the law of that State for the purposes of the taxes to which the Agreement applies, any meaning under the applicable tax laws of that State prevailing over a meaning given to the term under other laws of that State.

18. The Appellant stated that Section 2 of the ITA}} defines what a business is and that the same Section also defines what management and professional fees are. It therefore averred that the services received from Coca-Cola Sabco (Pty) Ltd related to technical fees and computer charges and that these services fall under the definition of management and professional fees captured by the contracted and consultancy fees as well as under the definition of a business. The Appellant contended that the services offered by Coca-Cola Sabco (Pty) Ltd were not subject to withholding tax and therefore the taxes paid were wrongly withheld and should be refunded by the Respondent.

19. To emphasize its position that professional activities are business activities and therefore their income which constitutes business profits, the Appellant relied on the case of Mckinsey and Company Inc. Africa Proprietary Limited v. Commissioner of Legal Services and Board Coordination (Tax Appeal No. 199 of 2020) which affirmed its position.

Appellant’s Prayers 20. In view of the foregoing, the Appellant prayed for judgement/orders against the Respondent that: -a.The application for taxes withheld on technical fees and computer charges of Kshs 7,087, 772. 00 be allowed.b.The Respondent be ordered to pay the refund of Kshs 7,087,772. 00 to the Appellant.c.The Appeal be allowed with costs to the Appellant; andd.Any other remedies that the Honourable Tribunal deems just and reasonable.

The Respondent’s Case 21. The Respondent countered the Appellant’s grounds through its Statement of Facts dated 19th January, 2023 and filed on even date.

22. In response to grounds (a), (b), (c), (d), (e) and (f) of the grounds of Appeal, the Respondent stated that the definition of an individual as used under Section 41 (5) of the ITA includes both natural and legal persons.

23. The Respondent contended that the Appellant was offered services by Coca-Cola Sabco (Pty) Limited based in South Africa and that it paid for these services and withheld taxes on the payments made. In seeking a refund of the withheld amounts it paid, the Appellant relied on the DTA between Kenya and South Africa which sought to prevent or reduce taxation of income generated in Kenya by South Africa based companies.

24. In response to the Appellant’s above assertion, the Respondent stated that there is an exemption to the application of DTA between Kenya and South Africa under the applicable Section 41 (5) of the ITA. The Respondent’s contention was that the person who would benefit from the reduction of the withholding tax of 0% would be Coca-Cola Sabco which has 50% or more of its underlying ownership held by Coca-Cola Company which is not a resident of South Africa. The Respondent argued that whereas both itself and the Appellant agree on these facts, the only difference arises on whether Coca-Cola Company could be considered an individual for the purpose of this provision.

25. The Respondent stated that the Appellant did not read the definition of individual in its entirety and should have considered the definition under Section 2 which states in part:“In this Act; unless the context otherwise requires –“Individual” means a natural person;”

26. The Respondent argued that the phrase “unless the context otherwise requires” signifies that a definition is not conclusive and that it provided an allowance that if context dictate otherwise another meaning may be imputed to the word already defined. Therefore, the term cannot in this very instance in the legislation be read in strict isolation from the context in which it appears and as such the Appellant should have taken heed of this fact.

27. The Respondent further stated that the context under Section 41(5) of the ITAis entirely focussed on the issue of residence and was introduced to curb “treaty shopping /abuse” where entities would try to take advantage of benefits accorded by bilateral trade agreements between Kenya and other countries in order to pay less taxes even though the final beneficiary or beneficiaries may not be the residents of contracting states in such agreements.

28. It was therefore the Respondent’s argument that in the context, then the term individuals would extend to legal and natural persons and that constructing the term ‘individual’ exclusively to natural persons would undermine the context under Section 41 (5) of the ITA. In case only residence of natural persons is considered, then Section 41 (5) of the ITAwould be rendered pointless as it would be avoided by creation of legal persons. The Respondent argued further that the term in the context of Section 41 (5) of the ITAtherefore captures legal persons as well, whose residence could be determined using either the place of incorporation test or the seat of management test.

29. The Respondent asserted that the amendment of Section 41(5) of ITAthrough the Finance Act 2021 was not a substantive change in law but rather a clarification and a restatement of what Section 41 (5) of ITAhad always been. As such since the Appellant has conceded that 50% or more of Coca-Cola Sabco is held by Coca-Cola Company which is a non-resident, and since the Respondent has demonstrated that the term individual as used under Section 41(5) of ITAincludes both natural and legal persons, then Coca-Cola Sabco was not entitled to relief, exemption or reduction of tax and that the Appellant is not entitled to a refund of the remitted amounts.

30. In response to ground (g) of the grounds of Appeal, the Respondent stated that since Section 41 (5) of ITAapplies, even the removal of tax by virtue of Article 7 of the Kenya-South Africa DTA is negated. It argued further that Section 45(1) of ITAis an exemption to any and all relief that would have been accorded to a taxpayer under the Double Taxation Agreement. The Respondent asserted that the effect of application of Article 7 is that if the payments are treated as income, then they are not to be taxed unless the recipient has a permanent establishment in Kenya through which it trades.

31. The Respondent countered the Appellant’s reliance in the Mckinsey case which held that professional fees and management fees paid to South African based providers are considered as profits under Article 7 which cannot be taxed unless such a provider carries on its business through a branch in Kenya considered a permanent establishment. In response to this it clarified that the application of Section 41 (5) of the ITAexcludes the potential beneficiary of tax exemption or reduction under the DTA from such exemption or reduction provided under any Article of the DTA. It argued further that if the party to benefit from the tax exemption has 50% or more of its underlying ownership held by a non-resident, then Section 41(5) of the ITAnegates the relief that such a party would otherwise be entitled under any provisions of the DTA including Article 7. As such the argument based on Article 7 does not apply. The Respondent asserted that it rightfully retained the amounts which the Appellant had withheld pursuant to Paragraph 3 (a) of the Third Schedule to the ITA.

32. In response to ground (h) the Respondent stated that the DTA was entered into pursuant to Section 41 of the Income Tax Act and that its application can as well be limited under this provision. Further, that in any case, Section 41 (5) of the ITAdoes not render the DTA inoperative but rather ensures that it is not abused. It is therefore complimentary to it.

33. In response to grounds (i) and (j) the Respondent stated on a without prejudice basis that even if the Appellant had wrongly remitted the withheld amounts, then the proper claimant for these amounts would be Coca-Cola Sabco (Pty). The Appellant merely withheld and remitted payments which belonged to another and as such cannot reclaim refund as it was not the payee. It is Coca-Cola Sabco (Pty) that should claim that part of its profits was wrongly withheld and remitted.

34. The Respondent therefore averred that the Appellant’s claim for a refund was misplaced and that it rightly rejected the Appellant’s application for a refund.

35. The Respondent prayed that this Honourable Tribunal finds: -a.That the Respondent’s decision to reject claims of Kshs 7,078,772. 00 for the relevant period was proper in law and conformed with the ITA and TPA.b.That this Appeal be dismissed with costs to the Respondent as the same is without merit.

Submissions of the Parties 36. In its Written Submissions dated and filed on 16th March, 2023, the Appellant has submitted on four issues:

i. Does the Kenya South Africa DTA apply in respect to the technical charges and computer charges? 37. On this issue the Appellant submitted that the services received from Coca-Cola Sabco (Pty) Ltd relate to technical fees and computer charges which fall under the definition of management and professional fees captured under the contractual and consultancy fees, a position that the Respondent agrees with at Paragraph 28 of its Statement of Facts. It submitted further that the services also fall under the definition of a business and are sufficiently covered in the Kenya-South Africa DTA.

38. The Appellant submitted that whereas Article (m) of the OECD Model Tax Convention in its commentary defines what a business is, in the Kenya-South Africa DTA, management and professional fees paid are not directly provided for. However, Article 7 of the Kenya-South Africa DTA provides for business profit. Further that Article 3 (2) of the same DTA provides that any term that has not been defined under DTA shall have the meaning that it has at that time under the law of that state for purposes of the taxes to which the Agreement applies, any meaning under the applicable tax laws of the State prevailing over a meaning given to the term under other laws of that State.

39. It was the Appellant’s submission that the position of the Government of Kenya is that management fees are considered as business profits as was held in the case of Tax Justice Network v Cabinet Secretary for National Treasury & 2 others (2019) eKLR “where the Cabinet Secretary in its submissions concerning the Kenya Mauritius DTA stated as follows:“That the taxing of services and management fees which the Petitioner is alleging is 0% was cleverly crafted and inserted under Article 5(3)(b)of the agreement while insurance Commissions are dealt with under Article 5(7).Article5 (permanent establishment) enables Kenya to tax services, management fees and insurance commissions since a permanent establishment is established to existent will be as provided in article 7 (business profits) which tax shall be so much as is attributable to that permanent establishment.”

40. The Appellant made reference to the Mckinsey case (Tax Appeal No 199 of 2020) and the Total Kenya case (TAX Appeal No 151 of 2016) where the Tribunal affirmed that management and professional fees are covered under business profits in the Kenya-South Africa DTA. The Appellant therefore submitted that the provisions of the DTA apply to the services rendered to the Appellant.

(ii) Is the Appellant entitled to relief from double taxation under Section 41 of the Income Tax Act? 41. The Appellant submitted that Section 41 of the ITAprovides for relief for double taxation between Kenya and South Africa with regard to taxation of income tax pursuant to the existence of the said DTA which was ratified in 2016. Further that Coca-Cola Sabco (Pty) Ltd passes the underlying ownership test as the underlying ownership of Coca-Cola Sabco (Pty) Ltd is the Coca-Cola Company which does not qualify as a natural person as the company is mainly held by institutional investors. It submitted that the amendment to Section 41(6) of the ITAeffected through the Finance Act 2021 had the effect of clarifying the word individual which was replaced by person which include individuals, companies and other entities.

42. It asserted therefore that it is entitled to relief from double taxation under Section 41 of the ITAsince limitation of benefit clause does not apply in its case as there is no individual or individuals who own more than 50% of the company in South Africa.

(iii) - Would limiting the Application of the DTA constitute a Treaty Override 43. The Appellant submitted that it is clear from the analysis above that the DTA applies to the technical fees and computer charges that were applicable to the Appellant and that the limitation of benefit charge would not apply taking into account the ownership structure of the Appellant. The Appellant submitted further that Double Tax Agreements form part of the laws of Kenya pursuant to Article 2(5) and 2(6) of the Constitution of Kenya, 2010 and as such the amendment effected through the Finance Act 2021 constitutes a Treaty Override as the DTA was signed in 2016 and that Kenya has an obligation to abide to International Agreements and the same cannot be amended through domestic legislation.

44. The Appellant contended that the decision of the Respondent to limit the application of the DTA renders the main object of the DTA redundant and fails to appreciate the supremacy of the DTA as a source of law in Kenya. It argued further that Treaty override generally refers to subsequent tax legislation that is in conflict with the terms of a treaty. Further that it is common doctrine that a subsequent general law does not override a prior special law and that a tax treaty is viewed as a special law.

45. The Appellant stated that this matter was addressed in the Canadian case of Alta Energy Luxembourg v The Queen S.A.R.I, 2021 SCC 49 where the Supreme Court held that domestic GAAR could not be used to reward tax treaties to prevent alleged treaty shopping when it was not explicitly provided for in the tax treaty. Further that the DTA between Kenya and South Africa does not explicitly contain anti-abuse provisions. It was therefore the Appellant’s assertion that the internationally acceptable way to address treaty provisions that conflict with later domestic tax policy is by way of negotiating appropriate amendments to tax treaties and not by unilateral overriding legislation.

46. The Appellant concluded by submitting that the withheld taxes on technical fees and computer charges were withheld erroneously and is therefore entitled to a refund.

47. In its Written Submissions dated and filed on 19th April, 2023, the Respondent has submitted on one issue.Whether the Appellant is entitled to relief from double taxation under Section 41 of the Income Tax Act.

48. The Respondent submitted that the Appellant was offered services by Coca-Cola Sabco (Pty) Limited which company is based in South Africa. It paid for these services and withheld taxes and remitted the taxes to the Respondent. It now seeks refund and relies on the DTA between Kenya and South Africa which seeks to prevent or reduce taxation of income generated in Kenya by South African based companies. The Respondent in reply to this stated that there is an exemption of the application of DTA under the applicable Section 41(5) of the ITA.

49. The Respondent submitted that based on the Section 41 (5) of the ITAthe person who would benefit from reduction of the withholding tax to 0% would be Coca-Cola Company which owns 50% or more of its underlying ownership held by Coca-Cola Sabco (Pty) and that the Coca-Cola Company is not a resident of South Africa which fact both the Respondent and Appellant are in agreement. However, the only difference arises on whether Coca-Cola Company could be considered an individual for the purposes of this provision.

50. The Respondent submitted that the Appellant did not read the definition of individual in its entirety and should have considered the definition under Section 2 in the following terms: -“In this Act, unless the context otherwise requires—‘individual’ means a natural person”

51. It submitted further that the phrase “unless the context otherwise requires” signifies that a definition is not conclusive and cannot in this very instance in the legislation be read in strict isolation from the context in which it appears. As such the Appellant should have taken heed of the fact.

52. The Respondent stated further that the context under Section 41 (5) of ITAis entirely focussed on the issue of residence and its aim was to make sure that any person benefiting from a reduction or removal of an income tax under any Double Taxation Agreement was a resident of the Partner State.

53. It was the Respondent’s contention that the fact that the Finance Act 2021 was enacted to change the term under Section 41(5) of ITAfrom individual to persons is further support of the fact that the context under Section 41(5) of ITArequires the reading of individual to include both natural and legal persons. It stated that since the Appellant had conceded that 50% or more of Coca-Cola company which is held by Coca-Cola Sabco (Pty) is held by Coca-Cola company which is a non-resident, and since the Respondent had demonstrated that the term individual as used under Section 41 (5) of ITAincludes both natural and legal persons, then Coca-Cola Sabco (Pty) was not entitled to relief, exemption or reduction of tax and the Appellant is not entitled to a refund of the remitted amounts.

54. In conclusion, the Respondent submitted that the Appellant merely withheld and remitted payments which belonged to another and as such cannot claim refund as it was not the payee. It therefore averred that it is Coca-Cola Sabco (Pty) that should claim that part of its profits that was wrongly withheld and remitted. The Appellant cannot therefore benefit under the Kenya-South Africa DTA.

Issues for Determination 55. The Tribunal has considered the parties’ pleadings, submissions and documentation availed and is of the view that this Appeal raises a single issue for determination:Whether the Appellant is entitled to the withholding tax refund

Analysis and Findings 56. The Appellant herein based in Kenya entered into a business relationship with Coca-Cola Sabco (Pty) Limited an entity based in South Africa where the Appellant was offered technical and computer services. It therefore paid Coca-Cola Sabco (Pty) Limited for the services it enjoyed however, it withheld tax of Kshs 7,087,772. 00 and erroneously remitted the same to the Respondent, hence its application for a refund, the subject of this Appeal.

57. It is important to appreciate that there exists a Double Taxation Agreement between Kenya and South Africa whose purpose is to ensure that resident persons and resident companies avoid double taxation and prevent fiscal evasion with respect to income taxes. The said DTA which was entered into in 2010 came into force in January 2016.

58. It is also important to note that both parties agree that the payment made by the Appellant to Coca-Cola Sabco (Pty) Limited were technical fees and computer charges that fall under the definition of management and professional fees, and that the same services also fall under the definition of business as covered in the Kenya-South Africa DTA.

59. Section 41 (1) & (2) of the ITAguides on the special arrangements for relief from double taxation as reinforced in the Double Tax Agreement entered into between the Kenyan and South African Governments. It provides as follows;“(1)Every special arrangement for relief from double taxation made with the government of any country outside the Republic of Kenya with a view of offering relief from double taxation in relation to income tax and any taxes of similar character imposed by the laws of that country shall, subject to subsection (2) but notwithstanding any other provision to the contrary in this Act or in any other written law, have effect in relation to income tax, and every such agreement shall be subject to the provisions of the Treaty Making and Ratification Act, 2012. (2)Subject to subsection (3), where an arrangement made under this section provides that income derived from Kenya is exempt or excluded from tax, or the application of the arrangement results in a reduction in the rate of Kenyan tax, the benefit of that exemption, exclusion, or reduction shall not be available to a person who, for the purposes of the arrangement, is a resident of the other contracting state if fifty percent or more of the underlying ownership of that person is held by a person or persons who are not residents of that other contracting state for the purpose of the agreement”.

60. It is not in dispute that the Appellant received services from Coca-Cola Sabco (Pty) South Africa and that the payment formed part of the business profits of the South Afric entity. By virtue of Section 41 (2) of the ITAand in consideration of the terms of the DTA this payment was exempt from tax. So, the question to be addressed is who is entitled to the funds that the Appellant withheld and paid to the Respondent?

61. The Respondent had submitted that indeed the Appellant had merely withheld and submitted payment which belonged to another and was therefore not the payee. According to the Respondent the rightful owner was Coca-Cola Sabco (Pty) Limited. The Tribunal has perused the documentation availed by the Appellant and has not found any evidence of a claim by Coca-Cola Sabco (Pty) for withheld funds from the Appellant or any evidence of a refund having been made to Coca-Cola Sabco (Pty) for the amounts indicated as having been wrongfully withheld.

62. The Tribunal in the circumstances concurs with the Respondent that the right to a claim for a refund of the withheld funds is exercisable by the party that offered the services, in this case, Coca-Cola Sabco (Pty) Limited. In the absence of any claim by the South African entity, the Appellant would be unjustly enriched from the refund of taxes paid to the Respondent.

63. In view of the foregoing the Tribunal holds and finds that the Appellant is not entitled to the refund and the Respondent was justified in rejecting the Appellant’s refund application.

Final Decision 64. The upshot of the above is that the Appeal lacks merit and the Tribunal accordingly proceeds to make the following final Orders:a.The Appeal be and is hereby dismissed.b.The Respondent’s objection decision dated 10th November, 2022 be and is hereby upheld.c.Each party to bear its own costs.

65. It is so ordered.

DATED AND DELIVERED AT NAIROBI THIS 26TH DAY OF JANUARY, 2024ERIC NYONGESA WAFULA - CHAIRMANDELILAH K. NGALA - MEMBERCHRISTINE A. MUGA - MEMBERGEORGE KASHINDI - MEMBERMOHAMED A. DIRIYE - MEMBERSPENCER S. OLOLCHIKE - MEMBER