Lecture 62 Β· Wadi Degla saved its PAYE with petty-cash vouchers, then paid withholding tax on interest it never sent.
π»ππ πͺπππ πΉπππ: A Nairobi sports club beat most of a KSh 58 million demand by documenting its director's drawings, but lost on withholding tax, because interest merely credited in the books is paid for tax even when no money moves.
Illustration: Precursor
Your company records interest on a loan from its foreign parent as an expense in the accounts, but never actually sends the money abroad. The tax office says the interest has been paid and wants withholding tax on it, while also treating your director's cash drawings as a disguised salary.
Put yourself in the finance director's chair. When you record interest to a foreign parent in your books but remit nothing, has it been paid for withholding tax?
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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