A landmark High Court decision has shaken Kenya’s digital marketplace, with far-reaching implications for gig platforms and the broader tech economy.

In Commissioner of Domestic Taxes v Sendy Limited [2025] KEHC 14814, the Court upheld the Kenya Revenue Authority’s (KRA) VAT assessment of K.Shs. 82 million against tech-logistics company Sendy Limited, ruling that the firm is not merely a digital intermediary but the actual supplier of transport services.

The dispute began after KRA’s audit revealed inconsistencies between Sendy’s declared turnover and the funds reflected in its bank accounts. While Sendy maintained that it only operated a digital marketplace connecting independent transporters with customers and earned income through commissions, KRA insisted that the company’s operational structure told a different story.

The Court agreed with the taxman. It found that Sendy exercised “decisive control” over the transactions by setting prices, dispatching drivers, billing customers in its own name and collecting payments directly. These elements, the judge ruled, placed Sendy squarely in the position of a principal supplier for VAT purposes.

In what could become a defining precedent for Kenya’s platform economy, the Court held that VAT is chargeable on the full value of customer payment, not just on the platform’s commission.

The judgment not only overturned the Tax Appeals Tribunal’s earlier decision in Sendy’s favor but also drew from European Union VAT jurisprudence, including the Uber and OnlyFans cases, to emphasize that in modern digital commerce, “control equals liability.”

For Kenya’s gig economy, the consequences could be profound. Platforms providing similar services to those of Sendy, may now need to register for VAT, review contracts and reassess their tax exposure.

Whether this decision signals maturity or a misstep in Kenya’s digital evolution remains to be seen. One thing, however, is clear the taxman has entered the gig economy and the rules of the digital hustle have officially changed.