Supreme Court Grants Commissioner of Domestic Taxes More Room in Absa Tax Appeal

The Supreme Court of Kenya has granted the Commissioner of Domestic Taxes (CDT) leave to file extended rejoinder submissions in a high-stakes tax dispute pitting the tax authority against Absa Kenya PLC, formerly Barclays Bank of Kenya.

In its ruling delivered on May 30, 2025, a five-judge bench composed of Deputy Chief Justice Philomena Mwilu, Justices Smokin Wanjala, Njoki Ndung’u, Isaac Lenaola and William Ouko, allowed the CDT to file rejoinder submissions not exceeding 30 pages.

This was a departure from the 15-page limit prescribed under Rule 37 of the Supreme Court (Amendment) Rules, 2020 and the Court’s practice directions on filing written arguments.

The taxman, through its legal team, had asked the Court to relax the page limit, arguing that the issues in the petition were weighty, novel, and of immense public importance.

The Commissioner submitted that the complexity of the matter, which touches on the interpretation of tax laws and their application to multinational financial transactions, could not be adequately addressed within the limited space.

Counsel insisted that failure to expand the rejoinder would curtail the CDT’s constitutional right to a fair hearing under Article 50 of the Constitution.

On the other hand, Absa Kenya, supported by the Kenya Bankers Association and Mastercard Asia Pacific — both of whom have been admitted as interested parties — opposed the request.

The bank argued that the CDT was attempting to reintroduce arguments already canvassed in lower courts and that expanding submissions would amount to an unfair advantage and a deliberate delay tactic.

Counsel for Absa submitted that the 15-page limit was designed to promote efficiency and brevity, noting that all parties should be bound by the same rules to prevent abuse of process.

In its considered ruling, however, the Supreme Court sided with the CDT, noting that the case had already been certified as one of general public importance under Article 163(4)(b) of the Constitution.

The judges held that the issues raised in the petition were indeed complex and had far-reaching implications for the banking sector and the administration of tax law in Kenya.

“We are satisfied that in the interest of justice, and in recognition of the public significance of this dispute, it is necessary to grant the applicant leave to file rejoinder submissions beyond the ordinarily prescribed limit.

This will enable the Court to benefit from a more exhaustive presentation of arguments before rendering its final determination,” the bench ruled.

The Court directed the Commissioner of Domestic Taxes to file the extended submissions within seven days from the date of the ruling. The other parties were also granted leave to respond accordingly, ensuring parity and fairness in the proceedings.

The dispute stems from a long-running contest between Absa Kenya and the Kenya Revenue Authority’s large taxpayer office over tax obligations allegedly arising from the bank’s operations and financial transactions. The case has attracted keen interest from the financial industry, with the Kenya Bankers Association warning that the outcome could set a precedent with wide-ranging consequences for tax compliance and banking practices in the country.

The matter will now proceed to the substantive hearing, where the Supreme Court is expected to pronounce itself on questions of statutory interpretation, the scope of tax assessments, and the balance between revenue collection and investor confidence in Kenya’s financial sector.