KRA loses bid to tax Liberty Life Sh162m on financial adjustments

The Kenya Revenue Authority (KRA) lost a Sh162.8 million tax dispute against Liberty Life Assurance after the court ruled that the insurer's accounting adjustments related to its life insurance business were not taxable shareholder transfers. The court upheld that these adjustments were mandatory compliance measures and not an artificial tax avoidance scheme. This ruling shields Liberty Life from corporate income tax assessments, penalties, and interest arising from financial restatements made between 2016 and 2020.