The export of services was moved from the zero-rated category to the exempt category by the Finance Act of 2020. The Finance Act of 2022 reclassified the export of services as taxable at the standard rate, except for BPO services, which were reinstated into the zero-rated category. This was challenged in Petition Number 338 of 2022. The High Court dismissed this petition, and, consequently, the classification by KRA of exported services as taxable stood.

The Petitioners sought to have Section 30(b) of the Finance Act 2022, which introduced VAT for exported services at the standard rate, declared unconstitutional and a further order directing the Kenya Revenue Authority to refund any money collected through VAT on exported services. 

Viva Africa Consulting argued that the inclusion of exported services in the Finance Act of 2022 not only amounted to double taxation but also violated the constitution's requirement for public participation because the amendments were made after the public participation exercise. It was Viva’s submission that the additional amendments ought to have been resubmitted to the public for their views since they were not contained in the Bill.

The KRA, which registered as the 12^th interested party, claimed that the ...