Lecture 72 Β· The taxman told the school its teachers were tax-exempt, then billed it KSh 124 million for believing him.
π»ππ πͺπππ πΉπππ: A bilateral treaty once exempted the Swedish school's teachers from PAYE, and the taxman confirmed it in writing. When a renewed treaty went silent and an audit reversed the advice, the tribunal held that silence is not exemption and the written assurance did not bind the taxman.
Illustration: Precursor
Your organisation pays foreign staff under a treaty that once exempted their salaries from local tax, and years ago the tax authority wrote to confirm the exemption. You relied on that letter and paid your people gross. Now an audit reverses the position and bills you for every year of PAYE you did not deduct.
Put yourself in the administrator's chair. When the authority's own letter says you are exempt, can it reverse that years later and charge you for having believed it?
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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