Lecture 112 ยท Rumish answered a banking-test bill with its ledgers, and the burden shifted to the taxman who would not fault them.
๐ป๐๐ ๐ช๐๐๐ ๐น๐๐๐: KRA treated almost every bank credit of Rumish Limited as income, a KSh 28.4 million bill. Rumish answered with audited accounts, reconciliations and schedules of its loans and refunds. The tribunal held the burden had shifted to KRA, which never faulted the documents, and set the assessment aside.
Illustration: Precursor
The authority runs its eye over your bank accounts and treats every credit as taxable income, the banking test. You answer not with a letter but with your audited accounts, your reconciliations, your ledgers and a schedule showing which deposits were loans, transfers and refunds. The authority confirms the bill anyway, without saying what was wrong with your papers.
Put yourself in the director's chair. When you answer a banking-test bill with your ledgers, does the burden then shift to the authority to fault them?
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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 ยท A director kept meeting the taxman instead of appealing, and four years on the bill had only grown.
๐ป๐๐ ๐ช๐๐๐ ๐น๐๐๐: 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 ยท 4 min read ยท Paid
Lecture 125 ยท A rice importer called cleaning and repacking manufacturing, and the court said packaging is not making.
๐ป๐๐ ๐ช๐๐๐ ๐น๐๐๐: 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 ยท 4 min read ยท Paid
Lecture 124 ยท A contractor said the money was his clients', had no agreements to show it, and the assessment stood.
๐ป๐๐ ๐ช๐๐๐ ๐น๐๐๐: 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 ยท 4 min read ยท Paid