Lecture 30 Β· Del Monte called its Kenyan arm a routine manufacturer, and the recharacterisation cost KSh6.7 billion.
π»ππ πͺπππ πΉπππ: Del Monte Kenya booked a 4.83% markup as a simple contract manufacturer while bearing the real risk. The tribunal held that the Kenyan grower, not the Swiss distributor, was the entrepreneur, and confirmed about KSh6.7 billion.
Illustration: Precursor
Your Kenyan company grows the crop, carries the weather and harvest risk, runs quality control, and ships for export, yet books a thin markup as a routine contract manufacturer. The tax authority says the label is wrong.
Put yourself in the group tax director's chair. Before you set a 4.83% return for Kenya, who in this chain actually bears the risk?
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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 28 Β· Hashi Energy ran foreign contracts from Nairobi and owed KSh7 billion in Kenya.
π»ππ πͺπππ πΉπππ: Hashi Energy argued its income belonged to the Congo, where the work happened. The High Court held that a Kenyan company running the contracts from Kenya is taxed in Kenya, and let a KSh7 billion bill stand.
Tax and financial judgement Β· 4 min read Β· Paid