Lecture 105 Β· The taxman recast Amply's airtime sales as a taxable service, and the plain words of the law exempted them.
π»ππ πͺπππ πΉπππ: KRA billed Amply, an airtime dealer, KSh 41 million by recasting its exempt airtime sales as a taxable distribution service. The tribunal read the exemption as written, struck the time-barred year on its own motion, and vacated the VAT, but upheld an income-tax head Amply never challenged.
Illustration: Precursor
You buy airtime in bulk and sell it on to small vendors, a supply the law says is exempt from VAT. The tax authority recasts what you do as a taxable distribution service, says the margin is a commission, and bills you more than your whole year's revenue.
Put yourself in the dealer's chair. When you sell airtime the law exempts from VAT, can the authority tax it as a service instead?
Continue reading
KES 49 for the rest of this piece.
About 704 more words, including the reasoning and what it means for operators. One payment, this piece, kept for good. No subscription and no renewal.
The Precursor Editorial Team
Precursor is published by the FinTech Association of Kenya and exercises independent editorial judgement under the Editorial Independence Charter. This article is labelled Precursor Executive Classroom, which marks commercial material. Knowledge on Tax and financial judgement.
Lecture 126 Β· A director kept meeting the taxman instead of appealing, and four years on the bill had only grown.
π»ππ πͺπππ πΉπππ: KRA confirmed a KSh 899,328 income-tax bill against Saphira, and its director spent four years in meetings and relied on his compliance certificates instead of appealing. The tribunal held meetings do not stop the thirty-day clock, a certificate is not proof of payment, and refused leave to appeal out of time; the debt had grown to KSh 1.4 million.
Tax and financial judgement Β· 4 min read Β· Paid
Lecture 125 Β· A rice importer called cleaning and repacking manufacturing, and the court said packaging is not making.
π»ππ πͺπππ πΉπππ: Mjengo claimed an investment deduction on KSh 1.5 million of machinery that cleaned and repackaged imported rice, calling it manufacturing. Through three forums the ruling held that packaging alone is not making goods, the rice remained rice, and a definition framed with 'means' is exhaustive. The deduction was refused.
Tax and financial judgement Β· 4 min read Β· Paid
Lecture 124 Β· A contractor said the money was his clients', had no agreements to show it, and the assessment stood.
π»ππ πͺπππ πΉπππ: KRA billed MU-BEI KSh 1.7 million after its eTIMS invoices far exceeded its declared sales. The company said the money was clients' funds for materials, passed on as an agent, but had no written agency agreements and no reconciliation. The tribunal held VAT fell due on the invoices and dismissed the appeal.
Tax and financial judgement Β· 4 min read Β· Paid