Burden of Proof (A Taxpayer’s Duty Extends Only to Documents in its Custody)

“This Section of the law is clear that a taxpayer would only be required to produce documents that are in its custody. This means that a taxpayer would be required to have and produce documents that it is reasonably expected to have regarding a transaction in question.

Section 59(1) (a) of the TPA is not a carte blanch for the Appellant to pick and choose which documents it has and which ones it does not have. Indeed Section 23(1) (b) of the TPA Act dictates that the Appellant is required to keep records of all its transactions. It provides as follows:

A person shall—

(a)…

b. maintain any document required under tax law to enable the person's tax liability to be readily ascertained;‖

The Appellant, cannot therefore run away from its statutory responsibility when it is requested to provide documents that support its transactions.”

This section allows the KRA to seek additional documents in support of the input tax claimed. That the Appellant was mandated by law to produce for examination any documents in its custody relating to the tax claimed.”