The question of who bears the burden of proof in tax disputes is among the most consequential procedural issues in tax litigation. It determines which party must lead with evidence, who suffers the consequences of evidentiary gaps, and ultimately whether a disputed assessment stands or falls. In the Kenyan context, although the Kenya Revenue Authority (KRA) issues assessments within a self‑reporting tax regime, the law places the primary burden on the taxpayer to demonstrate that a tax decision is incorrect. This rule is anchored in Section 56 of the Tax Procedures Act and Section 30 of the Tax Appeals Tribunal Act, and courts have affirmed that it reflects the ordinary principle of evidence that he who asserts must prove.
The burden first arises at the objection stage, where the taxpayer must file detailed grounds of objection, amendments required to be made and submit all relevant documents. Failure to provide supporting records has repeatedly resulted in objections being invalidated, extinguishing the right of appeal. Courts treat this step as jurisdictional and hold that if a taxpayer fails to provide evidence at the objection stage, they cannot later fault the Commissioner for not considering material that was never submitted.
While the legal burden always remains with the taxpayer, the evidential burden can shift like a “swinging pendulum.” When a taxpayer furnishes competent and relevant evidence, the presumption of correctness attaching to the Commissioner’s assessment weakens, requiring the Commissioner to justify the assessment before the burden shifts back. This dynamic is seen across all dispute types, including VAT claims, income tax assessments based on bank deposits, transfer pricing disputes, and missing trader cases. The taxpayer must present documentary proof beyond bare assertions. Once KRA raises credible forensic doubts, especially in missing-trader cases, the burden shifts back to the taxpayer to prove genuine commercial substance through delivery records, payment trails, and supplier verification.
The Commissioner’s duty to give reasons for its decision also interacts with the burden of proof. An objection decision that fails to address the taxpayer’s grounds or evidence does not reverse the legal burden but weakens the presumption of correctness attached to the tax decision, making it easier for the taxpayer to establish a prima facie case. By contrast, criminal offences under tax laws require proof beyond a reasonable doubt, and the presumption of innocence applies fully.
In Kenyan tax proceedings, which are civil in nature, the standard of proof is a balance of probabilities. Overall, Kenyan jurisprudence emphasises that tax disputes are won or lost on documentation. The taxpayer must present credible and relevant records at each stage, while the Commissioner must provide reasons and engage with the taxpayer's submitted evidence. The interplay between these duties determines when and how the evidential burden shifts, but the foundational rule remains constant: the taxpayer must prove that the assessment is incorrect.
