Sendy Loses KSh 82.2 million VAT Case in Kenya: What This Means for Uber, Bolt, and Glovo
A landmark High Court decision ordering the defunct logistics firm Sendy Limited to pay KSh 82.2 million in Value Added Tax has sent shockwaves through Kenya’s entire digital and gig economy. The ruling, delivered by Justice Helene Namisi on October 23rd, found that Sendy was the principal provider of delivery services, not merely a digital intermediary.
This judgment strikes at the heart of the “we’re just a tech platform” defense used by many gig economy companies. It has now set a significant precedent that could redefine the tax obligations for ride-hailing apps like Uber and Bolt, as well as delivery services such as Glovo.
The core of the legal battle was whether Sendy acted as a principal supplier or as a simple agent connecting customers to independent delivery riders. Sendy had argued it was just a technology platform and should therefore only pay VAT on the commission it earned from each transaction. The Tax Appeals Tribunal had initially agreed with this view.
However, Justice Namisi overturned that decision, finding that the KRA’s assessment was correct. The High Court determined that Sendy exercised a “decisive degree of control over the essential elements of the delivery service.” The judge noted that Sendy set the service terms, authorized deliveries, and crucially, received payments in its own name.
This level of control, the court found, meant that Sendy was not a passive middleman. For tax purposes, Sendy was deemed to be receiving the transport service from the riders and then supplying that service to the end customer. Consequently, VAT is liable on the full amount a customer pays for the service, not just the platform’s commission.
What this means for Uber, Bolt, and Glovo
The implications of this ruling are immediate and profound for Kenya’s booming digital economy. Platforms that have long operated under the “agent” model are now facing a major tax reckoning.
The KRA is now empowered by this precedent to pursue other platforms, demanding VAT on the gross value of all transactions they facilitate. This could dramatically increase the cost of doing business for ride-hailing and delivery apps. These companies may be forced to either absorb the 16% VAT, destroying their profit margins, or pass the cost on to consumers through significantly higher prices.
This decision also puts fresh pressure on the earnings of gig workers. If platforms are forced to remit more tax, they may seek to reduce driver and rider payouts to compensate. The ruling fundamentally challenges the business model that has allowed the gig economy to flourish, and its shockwaves are likely to reshape the industry for years to come.
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