1. This judgment is in respect of an appeal brought by the Kenya Revenue Authority (“the Appellant”) against the decision of the Tax Appeals Tribunal (“the Tribunal”) delivered on 21st March 2025, in the Nairobi TAT Appeal No. E825 of 2024, in which the Tribunal allowed the Respondent’s appeal and held that she was entitled to duty-free importation of a motor vehicle.
2. The Respondent, a person living with a disability, is duly registered with the National Council for Persons with Disabilities (NCPWD), and holds an Income Tax Exemption Certificate issued by the Kenya Revenue Authority (KRA) as a person with disability.
3. On 13th June 2024, the Respondent applied to the Appellant for exemption from Customs Duty and VAT for the importation of a used Toyota Harrier Hybrid (Chassis No. AXUH85-0002299), citing Part A, Paragraph 8 of the Fifth Schedule of the East African Community Customs Management Act (EACCMA) and Section 39(1) of Part 1 of Section A of the First Schedule of the Value Added Tax (VAT) Act.
4. The Appellant rejected this application on 1st July 2024, on the grounds that the nature of the Respondent's disability did not meet the legal criteria for exemption.
5. Following an application for review by the Respondent, the Appellant again rejected the application vide a letter dated 22nd July 2024, maintaining its initial stance.
6. Dissatisfied with the Appellant’s decision, the Respondent appealed to the Tax Appeals Tribunal. On 21st March 2025, the TAT delivered a judgment in favour of the Respondent, granting the sought-after exemption.
7. Aggrieved by the said judgment of the Tribunal, the Appellant filed the present appeal to this Court vide a memorandum of appeal dated 4th April 2025, raising the following grounds of appeal: -
i. That the Tribunal erred in law and fact by wrongly interpreting Section 114 (1) of the East Africa Community Customs Management Act as read together with Paragraph 8 of the 5th Schedule of the same Act;
ii. That the Tribunal erred in law by wrongly interpreting Section 39 (1) of Section A of Part 1 of the Value Added Tax (VAT) Act;
iii. That the Tribunal erred in law by failing to take into consideration the phrase “specially designed” as indicated in the law stated in the laws in Grounds (1) and (2) above as being significant when compared with Paragraph 4 of Part A of the Second Schedule of the Excise Duty Act which does not have such a phrase;
iv. That the Tribunal erred in law by failing to consider the intent and spirit of the law as provided for in Section 35 (3) of the Persons with Disabilities Act when it comes to modification of motor vehicles meant for use by persons with disabilities;
v. That the Tribunal misdirected itself on both facts and law, and thereby arrived at wrong, erroneous and absurd findings/decision.
8. Based on the foregoing, the Appellant prayed to have its appeal allowed with costs, set aside the judgment of 21st April 2025, and uphold the Appellant’s Review Decision of 22nd July 2024.
9. In opposition, the Respondent filed a Statement of Facts and a List and Bundle of Documents, both dated 4th April 2025.
10. The matter proceeded by way of written submissions. The Appellant filed its submissions dated 23rd July 2023, whilst the Respondent’s submissions are dated 12th June 2025.
Appellant’s Submissions
11. The Appellant’s central argument hinges on the interpretation of the phrases "modified or designed" (in the Persons with Disabilities Act - PWDA), "specially designed" (in EACCMA), and "specially designed for the sole use" (in the VAT Act).
12. The Appellant contends that Section 35(3) of the PWDA, Part A, Paragraph 8 of the Fifth Schedule to EACCMA, and Section 39(1) of Section A of Part 1 of the VAT Act provide for conditional exemptions, not automatic ones. The condition, according to the Appellant, is that the motor vehicle must be "modified or designed" or "specially designed" for the use of persons with disabilities, or "specially designed for the sole use" by disabled, blind, and physically handicapped persons.
13. According to the Appellant, the Respondent's automatic motor vehicle is not "modified or designed" or "specially designed" for persons with disabilities because any person can import and use such a vehicle. They assert that charging import duty would not, in this instance, "increase the cost of the motor vehicle to the disadvantage of the Respondent" as contemplated by the PWDA.
14. The Appellant points to Section 42 of the PWDA, which states that no person is eligible for an exemption under Section 35 unless it has been recommended by the National Council for Persons with Disability (NCPWD) and approved by the appropriate government authority (which the Appellant identifies as KRA). This, they argue, further demonstrates that the exemption is not automatic.
15. By contrast, the Appellant highlights Paragraph 4 of Part A of the Second Schedule of the Excise Duty Act, which simply states "One motor vehicle for use by persons with disability." The Appellant submits that the absence of phrases like "specially designed" or "sole use" in the Excise Duty Act signifies an automatic exemption, unlike the conditional exemptions in the EACCMA and VAT Act.
16. Relying on the principle of strict interpretation of tax laws, as articulated in Cape Brandy Syndicate v Inland Revenue Commissioners (1920) 1 KB 64, the Appellant asserts that the clear language of the EACCMA and VAT Act mandates a "specially designed" or "sole use" vehicle, which an ordinary automatic vehicle is not.
17. The Appellant thus concludes that the Respondent's motor vehicle does not meet the criteria for exemption under the EACCMA and VAT Act, and therefore the Appellant's initial decision disallowing the application was valid and should be upheld, with costs.
Respondent’s Submissions
18. The Respondent, on the other hand, asserts that the Tribunal correctly interpreted the applicable laws. She reiterates that she is a duly registered person living with a disability and possesses a KRA-issued Income Tax Exemption Certificate.
19. The Respondent acknowledges the relevant provisions in EACCMA, VAT Act, and the PWDA, which speak to "specially designed" or "modified or designed" vehicles, but argues that neither the EACCMA, VAT Act, Excise Duty Act, nor the Persons with Disabilities Act defines what constitutes "specially designed or modified" in respect of motor vehicles for use by disabled persons.
20. The Respondent submits that the phrase "specially designed or modified" should not be narrowly interpreted to mean only physically altered vehicles. Instead, it should include vehicles with features that are convenient for use by disabled persons.
21. In support of her argument, the Respondent refers to the expert testimony of Prof. Erastus C. Amayo, her doctor, before the Tax Appeals Tribunal. Prof. Amayo testified that the Respondent suffers from muscular weakness in both arms and legs, significantly limiting her physically demanding activities. The doctor told the Tribunal that he recommended a modified vehicle with features such as power-assisted steering and automatic transmission to mitigate the effects of her muscle weakness, as automatic vehicles reduce the physical demands of driving, making them more accessible for people with disabilities.
22. The Respondent herself testified to the electrical features of the imported vehicle that assist her with her specific disability.
23. The Respondent contends that the fact that an automatic vehicle can also be driven by a non-disabled person is not determinative; the focus should be on whether it is appropriate for use by a disabled or physically handicapped person.
24. The Respondent points out that the Tax Appeals Tribunal found that the Appellant, as an administrative body, had failed to publicly provide any guidance on the list of modifications or designs required for a motor vehicle to qualify for exemption.
25. The Respondent invokes the principle that in cases of uncertainty or ambiguity in the interpretation of a tax provision, such ambiguity must be resolved in favour of the taxpayer, citing Mount Kenya Bottlers Ltd and 3 others vs The Attorney General and 3 others, Civil Appeal No.164 of 2013 (2019) eKLR. She argues that the ambiguity in the definition of "specially designed or modified" leaves room for abuse by the Appellant and unfair interpretation.
26. Regarding Section 42 of the PWDA, the Respondent submits that its requirements were fully complied with. She was recommended and recognized by the NCPWD through her registration and valid disability card, and KRA, the appropriate government authority, formally approved her exemption status by issuing her with a Tax Exemption Certificate. Thus, the Appellant's reliance on Section 42 is misplaced.
27. The Respondent concludes that the Tax Appeals Tribunal correctly interpreted the applicable laws and was right in finding her entitled to the exemption.
Analysis and determination
28. Having considered the memorandum of appeal, the Respondent’s response thereto and the submissions filed by the parties, I find that the sole issue for determination is whether the Tribunal erred in law in finding that the Respondent was entitled to exemption from customs duty and VAT on the importation of the subject motor vehicle.
29. The appeal primarily revolves around the interpretation of statutory provisions granting tax exemptions to persons with disabilities, specifically the terms "modified or designed," "specially designed," and "sole use" within the Persons with Disabilities Act, EACCMA, and VAT Act. These statutory provisions are as follows: -
i. Section 114(1) of the EACCMA and Paragraph 8 of the Fifth Schedule thereto: These exempt from customs duty; materials, articles, and equipment, including one motor vehicle, that are “specially designed” for use by disabled or physically handicapped persons. Section 114(1) provides as follows: -
“114. (1) Duty shall not be charged on the goods listed in Part A of the Fifth Schedule to this Act, when imported, or purchased before clearance through the Customs, for use by the person named in that Part in accordance with any condition attached thereto as set out in that Pa rt;
Part A of the Fifth Schedule provides at the relevant provisions (paragraph 8 that: -
“8 Disabled, Blind and Physically Handicapped Persons
Materials, articles and equipment, including one motor vehicle, which: -
(a) are specially designed for use by disabled or physically handicapped persons or;
(b) ............”
ii. Paragraph 39(1) of Part I of the First Schedule of the VAT Act: This similarly exempts vehicles “specially designed for the sole use” of persons with disabilities in the following terms: -
“39. (1) Subject to paragraphs (2) and (3), materials, articles and equipment, including motor vehicles, which—
(a) are specially designed for the sole use by disabled and physically handicapped persons....”
iii. Section 35(3) of the PWDA: Exempts motor vehicles “modified or designed” for the use of persons with disabilities from various levies, including customs duty and VAT, where such charges would increase the cost to the disadvantage of persons with disabilities. The Section provides as follows: -
“35. Exemptions
(3) Materials, articles and equipment, including motor vehicles, that are modified or designed for the use of persons with disabilities shall be exempt from import duty, value added tax, demurrage charges, port charges and any other government levy which would in any way increase their cost to the disadvantage of persons with disabilities.”
iv. Finally, Paragraph 4 of Part A of the Second Schedule of the Excise Duty Act: Exempts “one motor vehicle for use by persons with disability” without the “special design” condition .
30. The Appellant urges this Court to adopt a strict textual reading of the exemption provisions, citing Cape Brandy Syndicate v IRC [1920] 1 KB 64, arguing that exemptions should not be inferred beyond the plain text of the statute.
31. The Respondent, on the other hand, argues that the phrase “specially designed or modified” must be interpreted purposively to include vehicles that are suitable for use by persons with specific disabilities, even if not uniquely or physically modified.
32. I find the Respondent’s argument more plausible. It is the view of this Court that the Appellant's argument that an "automatic motor vehicle" cannot be considered "modified or designed" or "specially designed" for persons with disabilities simply because non-disabled persons can also use it, is a narrow and potentially too restrictive interpretation.
33. The term "designed for the use of persons with disabilities" or "specially designed for use by disabled... persons", to my mind, does not necessarily imply exclusive use or physical alteration from a standard model. If the Appellant’s arguments were to prevail, then how would a motor vehicle be “specially designed or modified” for the sole use of visually impaired persons? In fact, it is the view of this Court that there are instances where a person with a disability (such as in the case of the blind) may qualify for an exemption without any modification at all being done to the motor vehicle, and despite that the fact that the motor vehicle is being driven by a person other than the disabled. What is material is that the vehicle is solely for their use.
34. While the general principle is that taxing statutes are to be strictly construed, this does not mean that the courts should abdicate their interpretive duty where ambiguity exists or where an absurdity may result. The court must breathe life into an enactment to give effect to the object and purpose of the legislation, particularly where the statute has a social or welfare function, as the PWDA clearly does.
35. Further, Article 259 of the Constitution enjoins this Court to interpret constitutional (and legislative) provisions in a way that furthers their intended purpose. Tax statutes are not exempt from this constitutional edict. It therefore follows that even in recognizing the general principle that tax statutes are to be strictly interpreted, the result of that approach must not produce results that are at variance with the overall purpose of the legislation.
36. This Court adopts and associates with the sentiments of Kuloba J (as he then was) in the case of Henry N Gichuru Vs The Minister for Health the Kenyatta National Hospital Board [2002] eKLR, where the Learned Judge stated that: -
“And, as it is well known, it is permissible for a judge to read in words which he considers to be necessarily implied by words which are already in the statute, and in a proper case he may add to, alter or ignore, statutory words, to prevent a provision from being unintelligible or absurd or unreasonable, unworkable or irreconcilable with the rest of the statute. If a judge considers that the application of given words in their ordinary sense would produce an absurd result which cannot reasonably be supposed to have been the intention of the legislature, he may apply them in any secondary meaning which they are capable of bearing. Although not binding on this court, I find the statements of the law by Lord Reid in Federal Steam Navigation Co Ltd v Department of Trade and Industry, [1974] 2 All ER 97, at p100, persuasive and with respect, approve of them.”
37. This approach has been validated by the Supreme Court in the case of Mitu-Bell Welfare Society v Kenya Airports Authority & others [2021] KESC 34 (KLR), where the Apex Court reiterated that courts should not adopt a narrow or technical reading but must give life and effect to constitutional rights using Article 259.
38. The Court of Appeal in the case of Kenya Revenue Authority v Republic (Ex parte Fintel Ltd) [2019] eKLR, in adopting a contextual (and purposive) approach, stated as follows: -
“While the words “upon payment” in their colloquial and ordinary parlance suggest “payment” or “paid”, that is, to be given money for something in exchange, it is our considered view that the relevant statute, the Income Tax Act must be the source of the meaning to be attached to it. The interpretation must be contextual..........A statute ought to be looked at, in the context of its enactment and as a whole as opposed to picking and choosing words in isolation. “No part of a statute and no word of a statute can be construed in isolation. Statutes have to be construed so that every word has a place and everything is in its place.” So said the learned Judges of the Supreme Court of India in Reserve Bank of India V. Peerless General Finance and Investment Co. Ltd., 1987 SCR (2) 1.”
39. In the present case, the Respondent adduced evidence, through her doctor's testimony, that her muscular weakness necessitates features like power-assisted steering and automatic transmission. These features, while common, are critical for her ability to drive safely and independently.
40. The Appellant's assertion that an automatic vehicle is not "specially designed" is too simplistic. While many non-disabled individuals drive automatic cars, for someone with specific physical limitations like the Respondent, an automatic transmission ceases to be a mere convenience and becomes a design feature that enables or significantly facilitates their ability to drive. It is "designed for their use" in the sense that it provides the necessary accommodation for their disability, unlike a manual transmission, which would be practically impossible or severely challenging for them to operate.
41. In this context, to the Respondent, an automatic vehicle is designed to accommodate her specific needs and mitigate the disadvantages arising from her disability. The purpose of the design, from the perspective of the disabled person, is key.
42. Further, the Appellant's attempt to distinguish between the Excise Duty Act (which appears to grant automatic exemption) and the EACCMA/VAT Act (which appears to make the exemption conditional) by focusing solely on the presence or absence of "specially designed" fails to consider the spirit and intent of the legislation as a whole, particularly the PWDA. The PWDA aims to promote and protect the rights of persons with disabilities, including facilitating their access to essential services and reducing the financial burden associated with their conditions.
43. Section 35(3) of the PWDA explicitly states that the exemption applies to materials and equipment, including motor vehicles, that are "modified or designed for the use of persons with disabilities" to prevent increasing their cost "to the disadvantage of persons with disabilities."
44. The Respondent's case demonstrates that without the exemption, the cost of acquiring a vehicle suitable for her condition would be increased, placing her at a disadvantage. The emphasis is on suitability for use by the disabled person, not on the vehicle being uniquely manufactured only for disabled people. The fact that a vehicle meets a disabled person's specific needs, as certified by a medical expert, aligns with the spirit of the PWDA.
45. In any event, it is not disputed that the Respondent has complied with Section 42 of the PWDA. The Respondent has been registered with NCPWD and issued a valid tax exemption certificate by the Appellant and therefore meets all requirements under Section 42.
46. It is further not in dispute that the Appellant did not provide any statutory or regulatory list setting out what qualifies as “specially designed or modified” and offered no expert evidence to rebut the Respondent’s case. Consequently, the conclusion by the Tribunal that in the absence of administrative clarity, the term should be interpreted in favour of the taxpayer, especially where medical necessity is established, is, in the view of the Court, merited.
47. For the foregoing reasons, this Court finds that the Tax Appeals Tribunal correctly interpreted the applicable laws in determining that the Respondent was entitled to an exemption from payment of Customs Duty and Value Added Tax (VAT) for the importation of her motor vehicle.
48. Accordingly, the Appellant's Appeal dated 4th April 2025 is hereby dismissed with costs. The decision of the Tax Appeals Tribunal delivered on 21st March 2025, is hereby upheld.
49. It is so ordered.
SIGNED, DATED, and DELIVERED IN VIRTUAL COURT THIS
31ST DAY OF JULY 2025
ADO MOSES
JUDGE
In the presence of: -
C/A – Moses
………………………..for the Appellant
……………….…..... for the Respondent
2. The Respondent, a person living with a disability, is duly registered with the National Council for Persons with Disabilities (NCPWD), and holds an Income Tax Exemption Certificate issued by the Kenya Revenue Authority (KRA) as a person with disability.
3. On 13th June 2024, the Respondent applied to the Appellant for exemption from Customs Duty and VAT for the importation of a used Toyota Harrier Hybrid (Chassis No. AXUH85-0002299), citing Part A, Paragraph 8 of the Fifth Schedule of the East African Community Customs Management Act (EACCMA) and Section 39(1) of Part 1 of Section A of the First Schedule of the Value Added Tax (VAT) Act.
4. The Appellant rejected this application on 1st July 2024, on the grounds that the nature of the Respondent's disability did not meet the legal criteria for exemption.
5. Following an application for review by the Respondent, the Appellant again rejected the application vide a letter dated 22nd July 2024, maintaining its initial stance.
6. Dissatisfied with the Appellant’s decision, the Respondent appealed to the Tax Appeals Tribunal. On 21st March 2025, the TAT delivered a judgment in favour of the Respondent, granting the sought-after exemption.
7. Aggrieved by the said judgment of the Tribunal, the Appellant filed the present appeal to this Court vide a memorandum of appeal dated 4th April 2025, raising the following grounds of appeal: -
i. That the Tribunal erred in law and fact by wrongly interpreting Section 114 (1) of the East Africa Community Customs Management Act as read together with Paragraph 8 of the 5th Schedule of the same Act;
ii. That the Tribunal erred in law by wrongly interpreting Section 39 (1) of Section A of Part 1 of the Value Added Tax (VAT) Act;
iii. That the Tribunal erred in law by failing to take into consideration the phrase “specially designed” as indicated in the law stated in the laws in Grounds (1) and (2) above as being significant when compared with Paragraph 4 of Part A of the Second Schedule of the Excise Duty Act which does not have such a phrase;
iv. That the Tribunal erred in law by failing to consider the intent and spirit of the law as provided for in Section 35 (3) of the Persons with Disabilities Act when it comes to modification of motor vehicles meant for use by persons with disabilities;
v. That the Tribunal misdirected itself on both facts and law, and thereby arrived at wrong, erroneous and absurd findings/decision.
8. Based on the foregoing, the Appellant prayed to have its appeal allowed with costs, set aside the judgment of 21st April 2025, and uphold the Appellant’s Review Decision of 22nd July 2024.
9. In opposition, the Respondent filed a Statement of Facts and a List and Bundle of Documents, both dated 4th April 2025.
10. The matter proceeded by way of written submissions. The Appellant filed its submissions dated 23rd July 2023, whilst the Respondent’s submissions are dated 12th June 2025.
Appellant’s Submissions
11. The Appellant’s central argument hinges on the interpretation of the phrases "modified or designed" (in the Persons with Disabilities Act - PWDA), "specially designed" (in EACCMA), and "specially designed for the sole use" (in the VAT Act).
12. The Appellant contends that Section 35(3) of the PWDA, Part A, Paragraph 8 of the Fifth Schedule to EACCMA, and Section 39(1) of Section A of Part 1 of the VAT Act provide for conditional exemptions, not automatic ones. The condition, according to the Appellant, is that the motor vehicle must be "modified or designed" or "specially designed" for the use of persons with disabilities, or "specially designed for the sole use" by disabled, blind, and physically handicapped persons.
13. According to the Appellant, the Respondent's automatic motor vehicle is not "modified or designed" or "specially designed" for persons with disabilities because any person can import and use such a vehicle. They assert that charging import duty would not, in this instance, "increase the cost of the motor vehicle to the disadvantage of the Respondent" as contemplated by the PWDA.
14. The Appellant points to Section 42 of the PWDA, which states that no person is eligible for an exemption under Section 35 unless it has been recommended by the National Council for Persons with Disability (NCPWD) and approved by the appropriate government authority (which the Appellant identifies as KRA). This, they argue, further demonstrates that the exemption is not automatic.
15. By contrast, the Appellant highlights Paragraph 4 of Part A of the Second Schedule of the Excise Duty Act, which simply states "One motor vehicle for use by persons with disability." The Appellant submits that the absence of phrases like "specially designed" or "sole use" in the Excise Duty Act signifies an automatic exemption, unlike the conditional exemptions in the EACCMA and VAT Act.
16. Relying on the principle of strict interpretation of tax laws, as articulated in Cape Brandy Syndicate v Inland Revenue Commissioners (1920) 1 KB 64, the Appellant asserts that the clear language of the EACCMA and VAT Act mandates a "specially designed" or "sole use" vehicle, which an ordinary automatic vehicle is not.
17. The Appellant thus concludes that the Respondent's motor vehicle does not meet the criteria for exemption under the EACCMA and VAT Act, and therefore the Appellant's initial decision disallowing the application was valid and should be upheld, with costs.
Respondent’s Submissions
18. The Respondent, on the other hand, asserts that the Tribunal correctly interpreted the applicable laws. She reiterates that she is a duly registered person living with a disability and possesses a KRA-issued Income Tax Exemption Certificate.
19. The Respondent acknowledges the relevant provisions in EACCMA, VAT Act, and the PWDA, which speak to "specially designed" or "modified or designed" vehicles, but argues that neither the EACCMA, VAT Act, Excise Duty Act, nor the Persons with Disabilities Act defines what constitutes "specially designed or modified" in respect of motor vehicles for use by disabled persons.
20. The Respondent submits that the phrase "specially designed or modified" should not be narrowly interpreted to mean only physically altered vehicles. Instead, it should include vehicles with features that are convenient for use by disabled persons.
21. In support of her argument, the Respondent refers to the expert testimony of Prof. Erastus C. Amayo, her doctor, before the Tax Appeals Tribunal. Prof. Amayo testified that the Respondent suffers from muscular weakness in both arms and legs, significantly limiting her physically demanding activities. The doctor told the Tribunal that he recommended a modified vehicle with features such as power-assisted steering and automatic transmission to mitigate the effects of her muscle weakness, as automatic vehicles reduce the physical demands of driving, making them more accessible for people with disabilities.
22. The Respondent herself testified to the electrical features of the imported vehicle that assist her with her specific disability.
23. The Respondent contends that the fact that an automatic vehicle can also be driven by a non-disabled person is not determinative; the focus should be on whether it is appropriate for use by a disabled or physically handicapped person.
24. The Respondent points out that the Tax Appeals Tribunal found that the Appellant, as an administrative body, had failed to publicly provide any guidance on the list of modifications or designs required for a motor vehicle to qualify for exemption.
25. The Respondent invokes the principle that in cases of uncertainty or ambiguity in the interpretation of a tax provision, such ambiguity must be resolved in favour of the taxpayer, citing Mount Kenya Bottlers Ltd and 3 others vs The Attorney General and 3 others, Civil Appeal No.164 of 2013 (2019) eKLR. She argues that the ambiguity in the definition of "specially designed or modified" leaves room for abuse by the Appellant and unfair interpretation.
26. Regarding Section 42 of the PWDA, the Respondent submits that its requirements were fully complied with. She was recommended and recognized by the NCPWD through her registration and valid disability card, and KRA, the appropriate government authority, formally approved her exemption status by issuing her with a Tax Exemption Certificate. Thus, the Appellant's reliance on Section 42 is misplaced.
27. The Respondent concludes that the Tax Appeals Tribunal correctly interpreted the applicable laws and was right in finding her entitled to the exemption.
Analysis and determination
28. Having considered the memorandum of appeal, the Respondent’s response thereto and the submissions filed by the parties, I find that the sole issue for determination is whether the Tribunal erred in law in finding that the Respondent was entitled to exemption from customs duty and VAT on the importation of the subject motor vehicle.
29. The appeal primarily revolves around the interpretation of statutory provisions granting tax exemptions to persons with disabilities, specifically the terms "modified or designed," "specially designed," and "sole use" within the Persons with Disabilities Act, EACCMA, and VAT Act. These statutory provisions are as follows: -
i. Section 114(1) of the EACCMA and Paragraph 8 of the Fifth Schedule thereto: These exempt from customs duty; materials, articles, and equipment, including one motor vehicle, that are “specially designed” for use by disabled or physically handicapped persons. Section 114(1) provides as follows: -
“114. (1) Duty shall not be charged on the goods listed in Part A of the Fifth Schedule to this Act, when imported, or purchased before clearance through the Customs, for use by the person named in that Part in accordance with any condition attached thereto as set out in that Pa rt;
Part A of the Fifth Schedule provides at the relevant provisions (paragraph 8 that: -
“8 Disabled, Blind and Physically Handicapped Persons
Materials, articles and equipment, including one motor vehicle, which: -
(a) are specially designed for use by disabled or physically handicapped persons or;
(b) ............”
ii. Paragraph 39(1) of Part I of the First Schedule of the VAT Act: This similarly exempts vehicles “specially designed for the sole use” of persons with disabilities in the following terms: -
“39. (1) Subject to paragraphs (2) and (3), materials, articles and equipment, including motor vehicles, which—
(a) are specially designed for the sole use by disabled and physically handicapped persons....”
iii. Section 35(3) of the PWDA: Exempts motor vehicles “modified or designed” for the use of persons with disabilities from various levies, including customs duty and VAT, where such charges would increase the cost to the disadvantage of persons with disabilities. The Section provides as follows: -
“35. Exemptions
(3) Materials, articles and equipment, including motor vehicles, that are modified or designed for the use of persons with disabilities shall be exempt from import duty, value added tax, demurrage charges, port charges and any other government levy which would in any way increase their cost to the disadvantage of persons with disabilities.”
iv. Finally, Paragraph 4 of Part A of the Second Schedule of the Excise Duty Act: Exempts “one motor vehicle for use by persons with disability” without the “special design” condition .
30. The Appellant urges this Court to adopt a strict textual reading of the exemption provisions, citing Cape Brandy Syndicate v IRC [1920] 1 KB 64, arguing that exemptions should not be inferred beyond the plain text of the statute.
31. The Respondent, on the other hand, argues that the phrase “specially designed or modified” must be interpreted purposively to include vehicles that are suitable for use by persons with specific disabilities, even if not uniquely or physically modified.
32. I find the Respondent’s argument more plausible. It is the view of this Court that the Appellant's argument that an "automatic motor vehicle" cannot be considered "modified or designed" or "specially designed" for persons with disabilities simply because non-disabled persons can also use it, is a narrow and potentially too restrictive interpretation.
33. The term "designed for the use of persons with disabilities" or "specially designed for use by disabled... persons", to my mind, does not necessarily imply exclusive use or physical alteration from a standard model. If the Appellant’s arguments were to prevail, then how would a motor vehicle be “specially designed or modified” for the sole use of visually impaired persons? In fact, it is the view of this Court that there are instances where a person with a disability (such as in the case of the blind) may qualify for an exemption without any modification at all being done to the motor vehicle, and despite that the fact that the motor vehicle is being driven by a person other than the disabled. What is material is that the vehicle is solely for their use.
34. While the general principle is that taxing statutes are to be strictly construed, this does not mean that the courts should abdicate their interpretive duty where ambiguity exists or where an absurdity may result. The court must breathe life into an enactment to give effect to the object and purpose of the legislation, particularly where the statute has a social or welfare function, as the PWDA clearly does.
35. Further, Article 259 of the Constitution enjoins this Court to interpret constitutional (and legislative) provisions in a way that furthers their intended purpose. Tax statutes are not exempt from this constitutional edict. It therefore follows that even in recognizing the general principle that tax statutes are to be strictly interpreted, the result of that approach must not produce results that are at variance with the overall purpose of the legislation.
36. This Court adopts and associates with the sentiments of Kuloba J (as he then was) in the case of Henry N Gichuru Vs The Minister for Health the Kenyatta National Hospital Board [2002] eKLR, where the Learned Judge stated that: -
“And, as it is well known, it is permissible for a judge to read in words which he considers to be necessarily implied by words which are already in the statute, and in a proper case he may add to, alter or ignore, statutory words, to prevent a provision from being unintelligible or absurd or unreasonable, unworkable or irreconcilable with the rest of the statute. If a judge considers that the application of given words in their ordinary sense would produce an absurd result which cannot reasonably be supposed to have been the intention of the legislature, he may apply them in any secondary meaning which they are capable of bearing. Although not binding on this court, I find the statements of the law by Lord Reid in Federal Steam Navigation Co Ltd v Department of Trade and Industry, [1974] 2 All ER 97, at p100, persuasive and with respect, approve of them.”
37. This approach has been validated by the Supreme Court in the case of Mitu-Bell Welfare Society v Kenya Airports Authority & others [2021] KESC 34 (KLR), where the Apex Court reiterated that courts should not adopt a narrow or technical reading but must give life and effect to constitutional rights using Article 259.
38. The Court of Appeal in the case of Kenya Revenue Authority v Republic (Ex parte Fintel Ltd) [2019] eKLR, in adopting a contextual (and purposive) approach, stated as follows: -
“While the words “upon payment” in their colloquial and ordinary parlance suggest “payment” or “paid”, that is, to be given money for something in exchange, it is our considered view that the relevant statute, the Income Tax Act must be the source of the meaning to be attached to it. The interpretation must be contextual..........A statute ought to be looked at, in the context of its enactment and as a whole as opposed to picking and choosing words in isolation. “No part of a statute and no word of a statute can be construed in isolation. Statutes have to be construed so that every word has a place and everything is in its place.” So said the learned Judges of the Supreme Court of India in Reserve Bank of India V. Peerless General Finance and Investment Co. Ltd., 1987 SCR (2) 1.”
39. In the present case, the Respondent adduced evidence, through her doctor's testimony, that her muscular weakness necessitates features like power-assisted steering and automatic transmission. These features, while common, are critical for her ability to drive safely and independently.
40. The Appellant's assertion that an automatic vehicle is not "specially designed" is too simplistic. While many non-disabled individuals drive automatic cars, for someone with specific physical limitations like the Respondent, an automatic transmission ceases to be a mere convenience and becomes a design feature that enables or significantly facilitates their ability to drive. It is "designed for their use" in the sense that it provides the necessary accommodation for their disability, unlike a manual transmission, which would be practically impossible or severely challenging for them to operate.
41. In this context, to the Respondent, an automatic vehicle is designed to accommodate her specific needs and mitigate the disadvantages arising from her disability. The purpose of the design, from the perspective of the disabled person, is key.
42. Further, the Appellant's attempt to distinguish between the Excise Duty Act (which appears to grant automatic exemption) and the EACCMA/VAT Act (which appears to make the exemption conditional) by focusing solely on the presence or absence of "specially designed" fails to consider the spirit and intent of the legislation as a whole, particularly the PWDA. The PWDA aims to promote and protect the rights of persons with disabilities, including facilitating their access to essential services and reducing the financial burden associated with their conditions.
43. Section 35(3) of the PWDA explicitly states that the exemption applies to materials and equipment, including motor vehicles, that are "modified or designed for the use of persons with disabilities" to prevent increasing their cost "to the disadvantage of persons with disabilities."
44. The Respondent's case demonstrates that without the exemption, the cost of acquiring a vehicle suitable for her condition would be increased, placing her at a disadvantage. The emphasis is on suitability for use by the disabled person, not on the vehicle being uniquely manufactured only for disabled people. The fact that a vehicle meets a disabled person's specific needs, as certified by a medical expert, aligns with the spirit of the PWDA.
45. In any event, it is not disputed that the Respondent has complied with Section 42 of the PWDA. The Respondent has been registered with NCPWD and issued a valid tax exemption certificate by the Appellant and therefore meets all requirements under Section 42.
46. It is further not in dispute that the Appellant did not provide any statutory or regulatory list setting out what qualifies as “specially designed or modified” and offered no expert evidence to rebut the Respondent’s case. Consequently, the conclusion by the Tribunal that in the absence of administrative clarity, the term should be interpreted in favour of the taxpayer, especially where medical necessity is established, is, in the view of the Court, merited.
47. For the foregoing reasons, this Court finds that the Tax Appeals Tribunal correctly interpreted the applicable laws in determining that the Respondent was entitled to an exemption from payment of Customs Duty and Value Added Tax (VAT) for the importation of her motor vehicle.
48. Accordingly, the Appellant's Appeal dated 4th April 2025 is hereby dismissed with costs. The decision of the Tax Appeals Tribunal delivered on 21st March 2025, is hereby upheld.
49. It is so ordered.
SIGNED, DATED, and DELIVERED IN VIRTUAL COURT THIS
31ST DAY OF JULY 2025
ADO MOSES
JUDGE
In the presence of: -
C/A – Moses
………………………..for the Appellant
……………….…..... for the Respondent