Doing Business in Kenya - RSM International

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granted or is partly granted, the balance of interest shall become payable within 90days of the determination of application. If the interest payable at determinationremains unpaid after the due date, a 2% surcharge shall be levied for each monthor part thereof during which it remains unpaid. Some of the penalties levied include:OffencePenaltyLate payment of taxInterest of 2% per month compounded. Theinterest chargeable shall not exceed 100%of the tax due. Interest is not chargeable onpenaltiesFailure to comply with the Commissioner’s notice Fine not exceeding Shs 15,000 and/or up to 6to pay money owed to a taxable person from months imprisonment and liability to pay thewhom tax is due, or furnish a return showing amount dischargedmonies held or due to a person from whom taxis dueFailure to produce books, records or provide Fine not exceeding Shs 15,000 and/or up to 6information as required by an authorised officer months imprisonmentFailure to produce books, records, statements Fine not exceeding Shs 15,000 and/or up to 2or other documents or to attend summons or to years imprisonmentanswer questions put by the Local TribunalMaking false statements, providing falseFine up to Sh. 400,000 or double the taxinformation, involvement in fraudulent evasion of evaded, whichever is the greater and/or 3tax, a non-registered person who holds himself out years imprisonment. In addition, any taxableas a registered persongoods connected with the commission of theoffence may be forfeitedFailure to display registration certificate in a Default penalty of up to Shs 20,000visible place in the business premisesand a fine of up to Shs 200,000 and/orimprisonment for up to 2 yearsLate submission of application for registration Penalty of Shs 20,000Failure to apply for registration Penalty of Shs 20,000Failure to issue a tax invoice as requiredPenalty of between Shs 10,000 and Shs200,000. Any goods connected with theoffence are liable to forfeitureFailure to keep proper books or recordsPenalty of between Shs 10,000 and Shs200,000Failure to submit a return5% of the tax due or a minimum penalty ofShs 10,000Failure to maintain an ETR and other general A maximum fine of Shs 500,000 and/or up topenalty for offences under the Act for which no 3 years imprisonmentspecific penalty is prescribedFalse VAT refund claimsDouble the tax claimed plus up to 3 yearsimprisonment58DOING BUSINESS IN KENYA
4.8.13 VAT Objections and AppealsThe Commissioner may issue an assessment for tax for a number of reasonsincluding:• Failure to keep proper books and records.• Failure to lodge a return.• The Commissioner not being satisfied with the return lodged.• Failure to apply for registration.Where a taxpayer receives an assessment from the Commissioner, he may within 30days of the service of the assessment object to the assessment. The date of serviceof notice or assessment is 10 days from the date of assessment. All such objectionsshall be accompanied with supporting documentation. The Commissioner mayamend the assessment in accordance with the objection; amend the assessment inlight of the objection according to the best of his judgement; or refuse to amend theoriginal assessment.Where the taxpayer still disputes with the original or the amended assessment, hemay appeal to the Tribunal by first giving the Commissioner a Notice of Appeal within30 days of being issued with the assessment, and then within 14 days of the Noticefiling a Memorandum of Appeal. Either party may appeal to the High Court againstthe decision of the Tribunal but only on a question of law or fact, or both. A furtherright of appeal against a High Court decision exists to the Court of Appeal. Any taxdeclared by a decision of the Tribunal must be paid before the appeal is registered.4.9 Excise DutyExcise duty is imposed under the Customs and Excise Act (Cap 472). The taxesare levied on various products including alcoholic beverages, tobacco products,petroleum products, motor vehicles, carbonated drinks and mineral water, cosmetics,jewellery and cell phone airtime. The taxes rates vary for different products. Some ofthe products on which excise duty is charged and the rates are:• Beers, ciders and spirits - The higher of Shs 70 per litre or 40% of the retailselling price• Wines - The higher of Shs 80 per litre or 40% of the retail selling price• Mineral and aerated waters - Shs 3 or 5%• Carbonated drinks, non-alcoholic beverages and juices - 7%• Tobacco products - Higher of Shs 1,200 per mille or 35% of retail selling price• Vehicles:• locally assembled 0%• imported 0 - 20%DOING BUSINESS IN KENYA59
Page 7: 2.0 General2.1 IntroductionKenya li
Page 13 and 14: Kenya Tanzania Uganda Rwanda Burund
Page 15 and 16: A huge chunk of the Act regulates m
Page 17 and 18: • Stamping of the Memorandum of A
Page 19 and 20: the Registrar within a statutory pe
Page 21: 3.2.3 Thin CapitalisationThin capit
Page 24 and 25: Where a business is carried on or e
Page 26 and 27: territory or domestic market. Motor
Page 28 and 29: • Unrealised foreign exchange los
Page 30 and 31: 4.2.6 Business with Non-Resident Pe
Page 32 and 33: Installments Due Date RateNon-Agric
Page 34 and 35: The current Personal Income Tax rat
Page 36 and 37: c) Housing• The higher of market
Page 38 and 39: partnership in which the husband or
Page 40 and 41: (1) East African Community partner
Page 42 and 43: Where the taxpayer still disputes w
Page 44 and 45: The VAT rates applicable in Kenya a
Page 46 and 47: 4.8.4 De-registration and Disposal
Page 48 and 49: • Payment is received for all or
Page 50 and 51: 4.8.7 Records, Invoices, Credit and
Page 52 and 53: A credit note should be serially nu
Page 54 and 55: However, where a motor vehicle or o
Page 56 and 57: Where there is no tax payable a ‘
Page 60 and 61: • Airtime on cellular mobile phon
Page 62 and 63: Transit VisasThese are visas requir
Page 64 and 65: Class K is for persons who have an
Page 66 and 67: 5.3.2 WagesAlthough the Employment
Page 68 and 69: NSSF provides the employee with a l
Page 70 and 71: 6.0 ACCOUNTING6.1 Statutory Framewo
Page 72 and 73: 7.0 INTELLECTUAL PROPERTYRIGHTSKeny
Page 74 and 75: Years 1 Shs 1,000Year 2 Shs 1,500Ye
Page 76 and 77: 8.0 Listing Rules8.1 The Capital Ma
Page 78 and 79: • At the date of application, the
Page 80 and 81: 8.3 Payable FeesCompanies pay an in
Page 82 and 83: 9.0 Investing in Kenya9.1 General I
Page 84 and 85: 9.3 Foreign Ownership of Shares and
Page 86 and 87: Contact Details - RSM AshvirRSM Ash
Page 88 and 89: Appendix of Acronyms used in the Bo
Page 90: Notes90DOING BUSINESS IN KENYA

Doing Business in Kenya - RSM International

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