Meat processor Farmers Choice Limited has lost a tax appeal after a tribunal found that it filed its challenge against a Kenya Revenue Authority (KRA) tariff decision outside the statutory deadline.

The Tax Appeals Tribunal struck out the manufacturer’s appeal and upheld KRA’s April 10, 2025 review decision on the classification of an imported ingredient used in the manufacture of sausages and other processed meat products.

The dispute arose from two consignments imported on October 15, 2024. Farmers Choice declared the ingredient under a general food preparation tariff but KRA reclassified it under a category for preparations used to manufacture food and beverages.

The classification affects the customs duty and other taxes payable on the imports.

Farmers Choice sought a review on March 19, but KRA upheld the classification decision on April 10.

The company did not appeal within 45 days as provided under the East African Community Customs Management Act (EACCMA), 2004. It continued discussions with KRA before filing its tribunal appeal on January 16, 2026.

Tariff classification

“The company did not challenge KRA’s decision to change the tariff classification of PRO FIT 1:50 within the required period,” the tribunal said.

It added that the January 2026 appeal was way outside the statutory timelines as prescribed under Section 230 of the EACCMA.

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The disputed demands followed the reclassification. KRA issued two demands on May 9, 2025, seeking Sh2.3 million and Sh1 million.

Farmers Choice challenged the calculations, saying KRA had applied import duty at 25 per cent instead of 10 per cent. It also disputed a Railway Development Levy rate of two per cent instead of 1.5 per cent.

Times Tower, the Kenya Revenue Authority's head office in Nairobi.

Photo credit: File | Nation Media Group

The company, which was established in 1980 and produces fresh and processed meats including sausages, bacon, smokies, ham, pork, beef, lamb and chicken, further argued that KRA wrongly applied VAT. Its business includes pig farming and procurement.

Farmers’ Choice said that KRA failed to recognise the product’s claimed exemption from VAT under the tax law.

Farmers Choice also argued that KRA failed to communicate a review decision within 30 days required under the East African Community Customs Management Act.

The company said the application should therefore have been deemed allowed by operation of law.

It told the Tribunal that KRA’s enforcement included withholding consignments, locking access to its customs system and requiring a bank guarantee.

The company said KRA’s detention of the consignments caused demurrage, storage and other related charges as the goods remained held for extended periods.

Farmers Choice further told the Tribunal that the dispute and enforcement measures disrupted its operations and forced it to indefinitely suspend a multibillion-shilling modern pig-rearing project in Naivasha, saying the uncertainty affected its future commercial decisions.

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KRA disputed that account. It said one demand was withdrawn because the relevant entry used an inward-processing regime, while the other concerned a duty-paid entry on which VAT was payable.

KRA also argued that a demand notice was not the appealable decision because the tariff ruling was the relevant decision.

KRA later withdrew one demand after determining that the related entry was under inward processing, where the authority said VAT was not payable. It maintained the second demand because that consignment was entered under the duty-paid regime.

Farmers Choice contested that distinction and said KRA had treated two demands arising from the same product inconsistently. The company also said KRA detained additional consignments while enforcing the disputed demand.

The Tribunal accepted KRA’s procedural argument but did not determine whether the taxes were due.

“Having established that the appeal is invalid, the Tribunal will not delve into the second issue as the same has been rendered moot,” the judgment states.

The Tribunal struck out the appeal and upheld KRA’s April 10, 2025 review decision.

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jwangui@ke.nationmedia.com