The Kenya Revenue Authority (KRA) has won a case against collapsed logistics technology firm Sendy Limited after the High Court ruled that the company is liable for Value Added Tax (VAT) on the full value of transport services facilitated through its platform , and not just on its commission income.
- •The case centred on whether Sendy, which connected customers with independent transporters, merely provided a digital marketplace or actually supplies transport services.
- •Justice Helene Namisi overturned a 2024 Tax Appeals Tribunal decision that had exempted Sendy from paying VAT on the total delivery charges, finding that the firm operates as a principal service provider rather than a mere digital intermediary.
- •The court upheld KRA’s VAT assessment of KSh82.2 million, marking a precedent-setting ruling for Kenya’s fast-growing digital and gig economy platforms.
“By setting terms, authorising deliveries, and collecting charges in its own name, Sendy acts as a principal in the transaction,” Justice Namisi ruled. “It is, therefore, deemed for VAT purposes to have received the transport service from the third-party transporter and to have supplied that same service to the end customer.”
The judge sided with KRA’s argument that Sendy exercises “decisive control” over pricing, dispatch, billing, and payment akin to global ride-hailing platforms such as Uber.
“While KRA’s reversal of its own binding ruling raises questions of administrative fairness, legitimate expectation cannot override statutory interpretation,” Justice Namisi said.
Sendy had relied on a 2020 private ruling issued by KRA confirming that transporters, not the platform, were responsible for VAT.