This Alert brings to your attention the Tax Appeals Tribunal’s (“the TAT” or Tribunal”) judgement in the case of Libya Oil Kenya Limited (Appellant) vs. Commissioner of Investigations and Enforcement (Respondent) on import duty and levies on petroleum product gains.


The Respondent conducted a transfer pricing review on the Appellant’s transactions for the years 2012 to 2014. Upon the issuance of preliminary audit findings for an estimated principal tax liability of KES 613,519,718, and following several consultative meetings and the Appellant’s formal response to the preliminary findings, the Respondent issued a notice of assessment on 6 July 2018 demanding additional taxes amounting to KES 10,074,047,904 for the years 2010 to 2016, broken down as follows:


Amount in KES

Product gains


Variance between product purchases and duty paid volumes


Variance between turnover for VAT and Corporation Tax


Application for Section 90(1) (now repealed) of the Income Tax Act (‘ITA’)




The Appellant lodged a Notice of Objection dated 2 August 2018 and the Respondent issued its Objection Decision dated 3 September 2018 confirming the Assessment in its entirety. The Appellant, being dissatisfied with the Respondent’s Objection Decision, filed a Notice of Appeal to the Tribunal on 1st October 2018. At the request of the Respondent, the parties agreed to engage in Alternative Dispute Resolution discussions and a partial consent was recorded on 15 December 2020 with the Tribunal. 

The parties submitted the unresolved principal tax assessment of KES 943,152,856 on product gains arising from Kenya Pipeline Company (KPC) gains, temperature gains, hospitality gains and storage terminal gains to the Tribunal for determination.