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A direct tax is one whose impact as well as incidence falls on one and the same person while an indirect tax has its impact on one person and incidence is partly or wholly on another person. Examples of a direct tax include income tax, wealth tax, gift tax, inheritance tax and corporation tax. Examples
One-way the Government can be able to generate tax revenue from informal sector is designating areas of informal sector operations so as to make easy registrations and collection of tax/charges from such operators. Others: Introducing indirect tax on items used by informal sector operations. Introduce direct tax on informal operations.
To prevent or curb loss of revenue on imports, Mombasa port should seal loopholes by:- Ensuring that import declaration procedures as well as pre-shipment inspections be improved and tightened. Offshore inspections and proper classifications of goods imported be done. Goods in transit must reach countries of destination and not converted into use in the country
The items to be included as qualifying expenditure include: Buying price of the asset Any customs duty and Vat paid on the asset Installation costs Insurance on transit and transport costs before the asset is brought into use Cost of demolition of a building to accommodate the asset Any repair cost incurred before the asset
Value Added Tax (VAT) is a multi-stage indirect tax based on the expenditures of individuals as well as legal persons and services on taxable goods and services charged and collected by traders/businessmen acting as agents to the taxing authority. Registered persons are required to charge output VAT on Sales made of taxable goods and services
Three ways in which the government may lose tax revenue on imports are:- 1. Collusion 2. Use of wrong rates or valuations for goods 3. Conversion of goods on transit for local use. Collusion may take place between customs officials and taxpayers in order to escape or pay less tax. Wrong rate or valuations may
VAT increases prices of goods or services hence may reduce sales and profitability VAT calls upon a registered person (trader) to maintain expensive elaborate records in addition to penalties, where VAT is not paid on time or a return has not been submitted, etc. In the case of credit sales the trader will be required
Qualifying expenditure – the cost of the asset (used for generating taxable income) which should qualify for a capital allowance/deduction
A tax is a compulsory contribution by persons liable to pay tax to the state to defray the expenses incurred in the common interest of all, without reference to special benefits conferred. By compulsory we mean any person who refuses to pay a tax is liable to punishment. Tax revenue is used for the benefit
The role of a value added tax tribunal is that of an appeals body for the purpose of hearing and deciding on appeals where a taxpayer is dissatisfied with the ruling by the commissioner for value added tax. The appeals Tribunal has powers of a subordinate court of the first class to summon witnesses, to