Nairobi, July 16 -- The Court of Appeal has ruled that logistics services for exports qualify for zero-rated Value Added Tax (VAT), dealing a blow to the Kenya Revenue Authority (KRA), which sought to impose a levy on the utilities.

The court said that taxation of export services should be done where the end product is consumed and not where the logistics are physically performed.

The July 10, 2026 decision by the court arose from a dispute between Airflo Ltd, formerly Panalpina Airflo Limited, and the Commissioner of Domestic Taxes over VAT refunds amounting to Sh46 million.

Zero-rated Value Added Tax (VAT) applies a zero percent tax rate to goods and services. Under the arrangement, customers are not charged any VAT, but businesses c...