19/04/2026
Kenya Revenue Authority is not playing around
You know Naivas — one of Kenya’s biggest supermarket chains, originally built as a family-owned business.
Over time, the ownership structure was reorganized through offshore holding companies. Reports and filings indicate the use of Mauritius-linked entities, including NIL and a second holding layer under GFI.
In that structure:
GFI held NIL
NIL ultimately held the Naivas Kenya shares
This kind of setup is often used in large businesses for investment structuring and shareholding consolidation.
In 2020, a transaction involving roughly a 30% stake in Naivas, valued at about KSh 5.2 billion, was carried out through the offshore holding structure — meaning the transfer happened at the level of the holding companies rather than directly within Kenya.
On paper, the transaction was outside Kenya’s immediate share register movement.
However, the Kenya Revenue Authority reviewed the arrangement and raised a key concern:
Even if a company is registered offshore, if it is managed and controlled from Kenya, it can still be treated as a Kenyan tax resident.
KRA’s position was that the substance of control over NIL and GFI remained in Kenya, and therefore the gains from the transaction were taxable locally.
They issued a tax assessment of approximately KSh 1.8 billion including penalties.
The matter went to the Tax Appeals Tribunal, which upheld KRA’s position based on the principle that economic substance and control outweigh offshore registration.
Lesson:
Ownership structures can be global — but tax authorities focus on where real control and decision-making happens. Substance will always override structure.
