KNEC| KASNEB| KISM| Study notes and Revision materials for schools in Kenya. KNEC certificate courses, Diplomas, Higher Diplomas, KISM courses cpsp-k and aps-k, KASNEB cpa, atd, cs, cifa, ccp, dcm, cict and cict, Ksce and Kcpe
Tax position of the income of a deceased person Income accrued to or received prior to date of death of a deceased person which would have been assessed on him for a year of income shall be assessed and tax charged on his executors or administrators for that year of income. Income received by executors
If a business is making taxable supplies, the value of these supplies is called taxable turnover. All goods are taxable except those listed in the second schedule of VAT Act as exempt. Taxable services are listed in the third schedule of VAT Act. All other services are exempt. If a business supplies taxable goods or
Direct Tax: Impact and incidence is on the same person e.g. PAYE, imports or exports, corporate tax etc. Tend to be elastic Indirect Tax: Impact and incidence falls on different persons. Tend to be inelastic since these taxes are imposed mainly on the necessities examples are VAT, custom duty etc.
Four methods the Commissioner of Income Tax is empowered to use in collecting overdue tax Commissioner of Income Tax can use for the recovery of the tax through a court of law. Commissioner of Income Tax can collect the tax through authorized agents under Section 96 Can collect under Section 102 by distress i.e. can
Recovery of tax from persons intending to leave on having left Kenya. Commissioner is required to issue estimated assessment as quickly as possible and according to the best of his judgement, to persons who are about to leave Kenya.
Taxable capacity of the people refers to the extent of their ability to pay tax. Four factors affecting/influencing taxable capacity in a country are: Number of inhabitants: The larger the number the greater is the taxable capacity of the community to contribute towards the expenses of the Government. Distribution of wealth: Where wealth is more
It is a taxable benefit on the employee where the employer provides accommodation For agricultural employees, HB is equal to 10% of pensionable pay For directors other than whole time service directors HB is the higher of: 15% of total income from all sources or fair market rental value or actual rent paid by employer.
Employer for PAYE purposes includes: Any person having contract of payment of remuneration. Any agent or manager or other representative in Kenya of any employer who is outside Kenya. Any paying officer of the government or public authority Any institution or insurance company or other body of pension paying pensions. A manager of a branch
Factors that influence tax shifting: Type of tax – direct tax cannot be shifted but indirect tax can. Objects of a tax – e.g. income tax can not be shifted. Price elasticity of supply and demand Availability of substitutes – goods without substitutes means consumer bear the tax. Geographical coverage of the tax – can
Strictly speaking, it is not possible to distinguish between farm works deductions and capital deduction. Farm works deductions are, to all intents and purposes, capital deductions. Capital deductions are unique as they relate to farm works. Other capital deductions mainly relate to manufacture