i. Distinguish between a tax refund and a tax credit
A tax refund, also called a tax rebate, is an-amount payable to a taxpayer when the tax liability is less than the tax paid. Taxpayers can often get a tax refund on their income tax if the tax they owe is less than the sum of the total amount of the withholding taxes and estimated taxes that they paid. Tax refunds are given back at the end of the financial year.
A tax credit is a sum deducted from the total/amount a taxpayer owes to the state. Most tax credits are set off a t source before remission of tax to the state. Tax credits may be granted in recognition of taxes already paid and cover various taxes including income tax, property tax and value added tax (VAT).
ii. Fundamental role of tax credits and tax refunds
Tax credits and refunds are mainly offered as incentives to achieve a government goal, such as to promote investments or to encourage" people to pay taxes . For instance, multinational companies may be given tax credits in relation to taxes paid on their credits in relation to taxes paid on their foreign operations as a way of encouraging foreign direct investments. In addition, companies that may have overpaid taxes in one year may be given the confidence of taxpayers on the tax administration system as an efficient, accountable and transparent system.
Wilfykil answered the question on February 25, 2019 at 12:08
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Justify the imposition of shortfall tax on companies
(Solved)
Justify the imposition of shortfall tax on companies
Date posted:
February 25, 2019
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Answers (1)
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Discuss four tax incentives that could "have contributed to the growth of financial markets in your country.
(Solved)
Discuss four tax incentives that could "have contributed to the growth of financial markets in your country.
Date posted:
February 25, 2019
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Answers (1)
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The following information was provided by Chamka Ltd. for the year ended 31 December 2011.
(Solved)
The following information was provided by Chamka Ltd. for the year ended 31 December 2011.
Date posted:
February 25, 2019
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Answers (1)
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Mr. Maji Mengi knows very little about double taxation agreements. He is a consultant, who works in many countries and in many cases, he has...
(Solved)
Mr. Maji Mengi knows very little about double taxation agreements. He is a consultant, who works in many countries and in many cases, he has ended up paying taxes on the same income more than once.
Required:
Explain to Mr. Maji Mengi the concept of double taxation treaty.
Date posted:
February 25, 2019
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Answers (1)
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Having read in the press about the benefits accruing to Kenya businessmen as a result of regional initiatives such as the East African Community and...
(Solved)
Having read in the press about the benefits accruing to Kenya businessmen as a result of regional initiatives such as the East African Community and COMESA, Mr. Jitendra Kumar, a prominent foreign businessman has contacted you seeking your advice on how he could reduce his liability to tax arising from expansion of his business operations into Kenya
Required:
A report addressing in clear and concise details, the following matters raised by Mr. Jitendra Kumar.
(a) The tax objectives under the COMESA treaty.
(b) Rules of origin provisions under the COMESA treaty.
Date posted:
February 25, 2019
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Answers (1)
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Kenya has entered into double taxation agreements with a number of countries. Explain the meaning and implications of a double taxation relief.
(Solved)
Kenya has entered into double taxation agreements with a number of countries. Explain the meaning and implications of a double taxation relief.
Date posted:
February 25, 2019
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Answers (1)
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Outline the benefits which may accrue to a country from being a signatory to the most favored nation's status agreement
(Solved)
Outline the benefits which may accrue to a country from being a signatory to the most favored nation's status agreement
Date posted:
February 25, 2019
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Answers (1)
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Daniel Otwori, a resident of Kenya earned income from the countries listed below during the year ended 31 December 2006. Income from Kenya: ksh 1,765,000
(Solved)
Daniel Otwori, a resident of Kenya earned income from the countries listed below during the year ended 31 December 2006. Income from Kenya: ksh 1,765,000
Income from United Kingdom (UK) UK £4,800 net Tax deducted amounted to UK £960. The average exchange rate during the year was 1 UK £ = 140 KSH, .A double taxation agreement exists between Kenya and United Kingdom.
Required:
The double taxation relief (in Kenya shillings) due to Daniel Otwori for the year ended 31 December 2006.
Date posted:
February 25, 2019
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Answers (1)
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Hodari Nkan is resident of Kenya. During the year ended 31 December 2010, he received the following income:
(Solved)
Hodari Nkan is resident of Kenya. During the year ended 31 December 2010, he received the following income:
From Kenya: Sh. 720,000
From Zambia Sh. 540,000 (net of tax of sh. 78,000)
Assume that Kenya has a double taxation agreement with Zambia
Required:
The double taxation relief due to Hodari Nkan for the year ended 31 December 2010
Date posted:
February 25, 2019
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Answers (1)
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Identify and explain instances when a capital statement may be required.
(Solved)
Identify and explain instances when a capital statement may be required.
Date posted:
February 25, 2019
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Answers (1)
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Outline the main types of duties to be levied on goods according to the provisions of the Customs and Excise Act (Cap.472).
(Solved)
Outline the main types of duties to be levied on goods according to the provisions of the Customs and Excise Act (Cap.472).
Date posted:
February 25, 2019
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Answers (1)
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Giving appropriate examples, distinguish between forward and backward tax shifting.
(Solved)
Giving appropriate examples, distinguish between forward and backward tax shifting.
Date posted:
February 25, 2019
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Answers (1)
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Define the term "shortfall distribution tax". Under what circumstances can a company be exempted from shortfall distribution tax?
(Solved)
Define the term "shortfall distribution tax". Under what circumstances can a company be exempted from shortfall distribution tax?
Date posted:
February 25, 2019
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Answers (1)
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Write brief notes on the bodies the tax payer may appeal to incase he/she is aggrieved by the manner in which an objection for tax...
(Solved)
Write brief notes on the bodies the tax payer may appeal to incase he/she is aggrieved by the manner in which an objection for tax assessment to the commissioner has been dealt with.
Date posted:
February 25, 2019
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Answers (1)
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Write brief notes on Objections by the taxpayer of an assessment done by the commissioner
(Solved)
Write brief notes on Objections by the taxpayer of an assessment done by the commissioner
Date posted:
February 25, 2019
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Answers (1)
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Explain five types of notices of assessment
(Solved)
Explain five types of notices of assessment
Date posted:
February 25, 2019
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Answers (1)
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What are the contents of a notice of assessment?
(Solved)
What are the contents of a notice of assessment?
Date posted:
February 25, 2019
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Answers (1)
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Write brief notes on back duty.
(Solved)
Write brief notes on back duty.
Date posted:
February 25, 2019
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Answers (1)
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Explain the meaning of tax evasion
(Solved)
Explain the meaning of tax evasion
Date posted:
February 25, 2019
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Answers (1)
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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)