Lecture 53 Β· A registry stamped the papers four days late, and KRA tried to triple the tax to KSh417 million.
π»ππ πͺπππ πΉπππ: Rupen Haria sold shares and paid capital gains tax at 5% on 30 December, but the registry stamped the papers on 4 January, after the rate rose to 15%. The High Court held the transfer happened on the sale date, and a registry's delay cannot apply a new rate backwards.
Illustration: Precursor
You sell shares and pay capital gains tax at the rate in force on the day of the sale. A government registry takes a few days to stamp the transfer, and by the time it does, a new year has begun and the rate has tripled. The tax office bills you at the new rate.
Put yourself in the seller's chair. Does the date an office happens to stamp your papers decide the tax, or does the date you actually sold?
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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