Lecture 106 Β· The taxman demanded most of a restaurant's sales as tax, and the court called the assessment oppressive.
π»ππ πͺπππ πΉπππ: KRA billed a Malindi restaurant KSh 40 million, nearly three-quarters of its sales, taking the till figures as if they were profit. The High Court held the demand arbitrary and oppressive, made on the wrong law and without a fair hearing, and quashed it, though the taxman may reassess.
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The tax authority looks at the money through your tills, takes the sales figure as if it were profit, and bills you most of your turnover before you have paid for stock, staff, rent or power. It cites sections of the law to object under that have already been repealed, and sends an auctioneer before you can be heard.
Put yourself in the owner's chair. When the authority bills most of your sales as tax, has it taxed your profit, or your turnover?
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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