Lecture 114 ยท A county employee said the deposits were loans and reimbursements, and with no records a KSh 14 million bill stood.
๐ป๐๐ ๐ช๐๐๐ ๐น๐๐๐: KRA banked five years of deposits in a Busia County employee's accounts and assessed KSh 14 million. Oteba said the surplus was reimbursements and loans but produced no imprest records or loan agreements, and one of his own documents showed he had kept the money. The tribunal upheld the bill, reduced on objection.
Illustration: Precursor
Your salary is taxed and your rent is declared, so when money moves through your bank accounts you think your position is clear. The authority adds up every receipt over five years, deducts your known salary and rent, and treats the large surplus as undeclared income. You say the rest was reimbursements and loans, but you have kept nothing to show it.
Put yourself in the taxpayer's chair. When the authority banks the deposits in your salary account, how do you prove which were loans or reimbursements?
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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