Lecture 39 ยท Equity set up a staff share plan for KSh1,000, and the benefit to employees carried a KSh234 million PAYE charge.
๐ป๐๐ ๐ช๐๐๐ ๐น๐๐๐: Equity argued it had spent almost nothing on its employee share plan, so there was no benefit to tax. The Tribunal and High Court held the benefit is measured by what the employee gains, not what the employer spends, and that PAYE was due on the discount, a charge of KSh234 million.
Illustration: Precursor
Your bank sets up a share ownership plan that lets staff acquire shares below market value and hold them to vesting. The plan costs the employer almost nothing to establish. The authority says the discount the employees enjoy is a taxable employment benefit.
Put yourself in the head of tax's chair. Is the benefit measured by what the plan cost you, or by what the employee received?
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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