Kenya Tribunal Ruling Puts Digital Platforms Under Stricter Tax Scrutiny After Sendy’s $635,000 VAT Loss

Kenya’s logistics startup Sendy has lost a high-stakes legal battle against the Kenya Revenue Authority (KRA) over value-added tax (VAT) obligations, a decision that could reshape how digital platforms such as Uber and Bolt are taxed in the country. The Tax Appeals Tribunal (TAT) ruled that Sendy must pay KSh 98 million (approximately $635,000) in VAT arrears, setting a precedent for other digital service providers operating in Kenya’s fast-growing gig economy.

At the heart of the case was whether Sendy should be classified as a transportation service provider or merely a digital intermediary connecting users and drivers. Sendy argued that it was a technology platform that facilitates logistics by linking clients with independent drivers and, therefore, should not be subject to VAT on the value of services rendered through its platform. The KRA, however, maintained that Sendy directly provided logistics and delivery services and was thus liable for VAT on the full transaction value.

The tribunal sided with the tax authority, ruling that Sendy’s business model went beyond that of a passive intermediary. It concluded that the startup’s control over pricing, service quality, and customer engagement effectively made it a principal service provider rather than a neutral platform. Consequently, the tribunal found that Sendy was obligated to charge and remit VAT on all services provided through its system.

The ruling could have far-reaching implications for other digital economy players, including global ride-hailing firms Uber and Bolt, which have long argued that they operate as intermediaries rather than direct transport providers. Tax experts say the decision could push the KRA to demand VAT on the full fare value of trips booked through such platforms, potentially increasing costs for both drivers and consumers.

While Sendy has yet to announce whether it will appeal the decision, analysts note that the case underscores Kenya’s growing efforts to tighten tax compliance within the digital economy. As African governments seek new revenue sources, the verdict signals a shift toward treating tech-enabled platforms as full-fledged service providers rather than neutral facilitators.