These are illegal ways of reducing one's tax burden. It entails tax payers, deliberately misinterpreting or canceling the true state of their affair to the tax authorities to reduce tax liability and includes in particular.
a) Engaging in illegal or adventurous activities where the incomes have not been disclosed for tax purpose
b) Rendering services where the income on service rendered will be received in kind and not in cash i.e. it is not recorded or disclosed
c) Related party transactions e.g. transfer pricing.
d) Preparation of fraudulent tax returns or dishonest tax reporting like under declaring and omission of taxable income, inflating deductible expenses or failure to submit or both.
Wilfykil answered the question on February 25, 2019 at 10:19
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It may be advantageous for a trader whose turnover is below the legislated turnover limits under the sixth schedule to the V AT Act to...
(Solved)
It may be advantageous for a trader whose turnover is below the legislated turnover limits under the sixth schedule to the V AT Act to register for VAT voluntarily. Under what circumstances could this be beneficial?
Date posted:
February 25, 2019
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Answers (1)
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Mrs. Carol Wasike is a practicing accountant working under the style and name of Wasike and Associates. Her firm is registered for Value Added Tax...
(Solved)
Mrs. Carol Wasike is a practicing accountant working under the style and name of Wasike and Associates. Her firm is registered for Value Added Tax (VAT). During the month of September 2001, she undertook and completed the following assignments:
Required:
(a) Prepare a VAT Account for Wasike and Associates for the month of September 2001.
(b) The VAT you have computed in (a) above, was paid on 22 October 2001 since 20 October was on a Saturday. The VAT return was also submitted on the same day. How much additional tax would be payable, if any?
(c) Kikwetu Limited was the subject of a creditors voluntary winding up and the appropriate resolution was passed on 1 April 2002. By that time the company paid Wasike and Associates only Sh.240,000 for services rendered. Assuming that all the conditions for the refund of bad debt relief are met, calculate the amount of VAT bad debt relief.
Date posted:
February 25, 2019
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Answers (1)
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Mr. Joseph Omuora commenced a soft drinks distribution business on 1 January 1998. He has not been maintaining proper books of account and the Commissioner...
(Solved)
Mr. Joseph Omuora commenced a soft drinks distribution business on 1 January 1998. He has not been maintaining proper books of account and the Commissioner of Income Tax has raised doubts about the accuracy of the annual tax returns submitted by him.
You have been appointed to estimate the correct amounts of taxable incomes for the years ended 31 December 1998, 1999, 2000, 2001 for comparison with those disclosed in the annual returns. These returns had disclosed the following profits or losses:
Date posted:
February 25, 2019
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Answers (1)
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Mediner Ltd. deals in a variety of goods in the month of September 2004, the Company accountant recorded the following transactions (exclusive of VAT):
(Solved)
Mediner Ltd. deals in a variety of goods in the month of September 2004, the Company accountant recorded the following transactions (exclusive of VAT):
The accountant believes that the allocative method is the best in restricting the input VAT deductible against output VAT. The accountant is also of the opinion that on average, twenty percent of the standard rate purchases were sold as standard rate sales.
Required:
Compute the input VAT deductible against output VAT using the allocative method.
Date posted:
February 25, 2019
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Answers (1)
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Explain how section 19 (1) of the VAT Act, on recovery of “tax due and payable from a person who owes money to the tax...
(Solved)
Explain how section 19 (1) of the VAT Act, on recovery of “tax due and payable from a person who owes money to the tax payer” may be enforced by the commissioner.
Date posted:
February 25, 2019
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Answers (1)
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Explain the requirements of an application for refund of VAT paid in respect of Bad debts.
(Solved)
Explain the requirements of an application for refund of VAT paid in respect of Bad debts.
Date posted:
February 25, 2019
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Answers (1)
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Explain briefly the meaning of “goods subject to customs control” under the Customs and Excise Act (Cap. 472)
(Solved)
Explain briefly the meaning of “goods subject to customs control” under the Customs and Excise Act (Cap. 472)
Date posted:
February 25, 2019
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Name four incentives given by the government to encourage the growth of capital market in Kenya
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Name four incentives given by the government to encourage the growth of capital market in Kenya
Date posted:
February 25, 2019
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Answers (1)
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Explain the term “thin capitalization.”
(Solved)
Explain the term “thin capitalization.”
Date posted:
February 25, 2019
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Answers (1)
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List four circumstances under which duty paid on imports is refundable
(Solved)
List four circumstances under which duty paid on imports is refundable
Date posted:
February 25, 2019
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Answers (1)
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Under what circumstances are imported goods considered to have been dumped in your country.
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Under what circumstances are imported goods considered to have been dumped in your country.
Date posted:
February 25, 2019
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The following details were extracted from the books of Abib Traders. VAT No.A11146789P for the month of December 2005.
(Solved)
The following details were extracted from the books of Abib Traders. VAT No.A11146789P for the month of December 2005.
Date posted:
February 25, 2019
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Answers (1)
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Zawadi Ltd is a Nakuru based company dealing in a variety of VAT designated goods. The following transactions were recorded for the month of September...
(Solved)
Zawadi Ltd is a Nakuru based company dealing in a variety of VAT designated goods. The following transactions were recorded for the month of September 2006:
Date posted:
February 25, 2019
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Answers (1)
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Mr. Dickson Maelfu is a-businessman with interests in the manufacturing sector. He is facing a back duty investigation by the revenue authority which suspects that...
(Solved)
Mr. Dickson Maelfu is a-businessman with interests in the manufacturing sector. He is facing a back duty investigation by the revenue authority which suspects that he has been under - declaring income four years from year 2003 to year 2006.
You are the head of the team from the revenue authority conducting this investigation. Maelfu has submitted to you records of his private and business assets and liabilities from 1 January 2003 to 31 December 2006 as shown below.
Date posted:
February 25, 2019
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Answers (1)
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Samia Ltd. reported the following income during the year ended 31 December 2007:
(Solved)
Samia Ltd. reported the following income during the year ended 31 December 2007:
Date posted:
February 25, 2019
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Answers (1)
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Briefly explain two conditions under which bad debt relief on VAT might be provided
(Solved)
Briefly explain two conditions under which bad debt relief on VAT might be provided
Date posted:
February 25, 2019
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Answers (1)
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Your client, Malipo Enterprises, had been operating since 1 January 2008 without filing income tax returns. The rapid but unexplained growth of the firm was...
(Solved)
Your client, Malipo Enterprises, had been operating since 1 January 2008 without filing income tax returns. The rapid but unexplained growth of the firm was brought to the attention of the tax-officers through die public media. The revenue authority officers lodged investigations from the period I January 2008 to 31 December 20] I and filed the following details from the business records:
Date posted:
February 25, 2019
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Answers (1)
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Explain The main tax incentives available to investors setting up companies in the Export Processing Zones (EPZs) in Kenya
(Solved)
Explain The main tax incentives available to investors setting up companies in the Export Processing Zones (EPZs) in Kenya
Date posted:
February 25, 2019
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Charitable trusts are nonprofit making organizations formed with the objective of promoting the social well-being of the general public. With reference to sections 25 and...
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Charitable trusts are nonprofit making organizations formed with the objective of promoting the social well-being of the general public. With reference to sections 25 and 26 of the income tax act (cap 470), explain the tax treatment of the charitable trusts
Date posted:
February 25, 2019
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Answers (1)
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Bima Insurance Company Limited is registered in Kenya to carry out life and general insurance business. From its general ledger and other records for the...
(Solved)
Bima Insurance Company Limited is registered in Kenya to carry out life and general insurance business. From its general ledger and other records for the year ended 31 December 2003, you have been able to extract the following information:
Date posted:
February 25, 2019
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Answers (1)