Lecture 99 Β· Letshego filed nil VAT for years, and a forgotten registration made it pay reverse VAT on imported services.
π»ππ πͺπππ πΉπππ: Letshego made only exempt loans and filed nil VAT, but it carried a dormant VAT registration inherited from 2004. Because it was still a registered person, the courts held it owed reverse VAT on its imported services, and a registration it never cancelled cost it KSh 93 million.
Illustration: Precursor
Your business makes only exempt supplies, so you charge no VAT and file nil returns, sure you owe the taxman nothing. But buried in the system is a VAT registration you inherited and never cancelled, and because it is still live, the law treats you as a registered person who must self-charge tax on every service you buy from abroad.
Put yourself in the finance director's chair. When an old VAT registration sits forgotten in the system, can it still make you pay?
Continue reading
KES 49 for the rest of this piece.
About 705 more words, including the reasoning and what it means for operators. One payment, this piece, kept for good. No subscription and no renewal.
The Precursor Editorial Team
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