Lecture 108 Β· Smartgas answered a banking-test bill with a letter and a summary, and without its books the assessment stood.
π»ππ πͺπππ πΉπππ: KRA treated every bank credit of an LPG company as income, a KSh 18 million bill. Asked for reconciliations, audited accounts, ledgers and licences, Smartgas produced only an objection letter and a note on VAT rates. The tribunal held the burden was its own and upheld the banking test.
Illustration: Precursor
The tax authority treats every credit in your bank accounts as taxable income, the banking test, and asks you to explain each deposit with reconciliations, audited accounts, ledgers and licences. You answer with a short letter of objection and a note about rate changes, and nothing else.
Put yourself in the director's chair. When the authority banks your deposits as income, who must prove which of them were loans or capital?
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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