Lecture 122 Β· Someone misused a company's PIN to import, and the taxman billed the company for goods it never sold.
π»ππ πͺπππ πΉπππ: KRA assessed Kapwell KSh 5.9 million on imports made under its PIN, which a business associate had misused. Kapwell reported the fraud, named the real importers, and showed it gave no written permission. The courts held KRA had failed its duty to investigate, and the assessment was vacated.
Illustration: Precursor
You file nil returns because you did no business that year, and then a tax bill arrives for goods you never ordered, never saw and never sold. Someone has used your tax number to import, and the authority, reading the customs data, treats those imports as your undeclared sales. You report the fraud and name the people who did it, but the bill stays.
Put yourself in the director's chair. When someone misuses your PIN to import goods you never sold, must you pay the tax, or must the authority investigate?
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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