A Kenya Power supplier has lost a Sh317 million tax dispute after a tribunal upheld the taxman’s assessment over unsupported input-tax claims. This brings renewed attention to the company behind a Sh2.9 billion Kenya Power smart metre contract that drew a lot of public debate and scrutiny about three years ago.
The Tax Appeals Tribunal dismissed Harley Berry Limited’s appeal following a finding that it failed to provide documents supporting its claim that the tax assessment was wrong.
“The appellant failed to file documents to demonstrate that the respondent (Commissioner of Domestic Taxes) erred in confirming the assessment,” the Tribunal said.
Harley Berry is also at the centre of a separate public procurement controversy involving Kenya Power’s Sh2.9 billion smart-metre supply contract awarded in 2023 through the State Department for Public Works.
The company came to public attention after being issued with the contract for 320,800 smart metres, a move that even attracted Parliamentary scrutiny with the Parliament’s Energy Committee seeking the tender evaluation committee minutes, the Principal Secretary’s authorisation and a procurement opinion concerning the award. The parliamentary and Senate inquiries did not establish any corruption or irregularity against Harley Berry in the smart-meter tender.
However, the two matters are separate. The tax case concerned VAT business records and whether input tax claims were properly supported, while the Parliamentary procurement inquiry concerns how the company obtained the meter contract.
The tax dispute began in March 2025 after the Commissioner of Domestic Taxes issued an additional assessment of Sh317.9 million for VAT covering 2022 to 2024.
Harley Berry objected, but KRA confirmed the assessment. The company then appealed, arguing it needed more time to retrieve supporting documents. The company argued that it had not been given enough time to retrieve manual records from its archives and obtain documents from suppliers.
It also said some input VAT could be traced through the iTax and eTIMS systems and should therefore have been allowed.
KRA rejected the argument, saying Harley Berry had filed nil returns from January to July 2022 despite having withholding-VAT credits.
The authority said the company later filed the pending returns, but failed to declare sales linked to withholding VAT certificates.
KRA also said it questioned input VAT claimed from suppliers who were nil filers, non-filers or unregistered for VAT when Harley Berry made the claims.
The authority singled out Coolextreme International Limited and Ndume Chainlinks Limited, saying Harley Berry claimed more input VAT than the suppliers’ declared sales.
KRA further said the company failed to provide supporting documents despite being asked for invoices, supplier confirmations and bank statements. Harley Berry maintained that it had supplied supporting material but needed more time to retrieve manual records.
The Tribunal ruled that the company had not produced sufficient evidence to overturn the assessment.
“The appellant provided none of the documents needed to support its VAT claims,” the Tribunal said.
It noted that Harley Berry had filed its notice of objection and KRA’s objection decision, but no documents demonstrating that the disputed input tax was claimable.
“The highlighted documents cannot demonstrate that input tax was claimable, nor do they demonstrate that the respondent erred in confirming the assessment,” the Tribunal said.
It added that Harley Berry had been given sufficient time to provide documents showing that the disputed inputs related to taxable supplies. The company failed to discharge its burden of proof.
The Tribunal consequently dismissed the appeal and upheld KRA’s July 25, 2025 objection decision.
The separate Kenya Power smart meter matter attracted Parliamentary inquiry following concerns raised by the Public Procurement Regulatory Authority over alleged irregularities in the award of the Sh2.9 billion smart-meter tender.
A June 2026 Senate report said the framework agreement was implemented through call-off orders, with prices of Sh9,150 for single-phase meters and Sh15,890 for three-phase meters. It said more than 320,000 meters were supplied between October 2023 and February 2024.
The Senate said its inquiry examined the procurement process, compliance with procurement law, local manufacture of smart meters and reforms to Kenya Power’s procurement system.
Kenya Power told senators that it used a Supplies Branch framework contract after facing an acute metre shortage and said Harley Berry had been introduced as a supplier with ready stock.
