Gazettement of Additional Land Parcels with Respect to the Nairobi Land Registration Unit

Posted on September 10th, 2021

Further to our legal alerts issued on 13th January 2021 and 6th April 2021, we wish to inform you that on 16th July 2021, the Ministry of Lands and Physical Planning (the Ministry) issued Gazette Notice 7146 of 2021(the Gazette Notice), which revoked Gazette Notice Numbers 11348 of 2020 and 520, 1706 and 1707 of 2021 on conversion and migration to new parcel numbers with respect to the Nairobi Land Registration Unit.

Consequently, please note that Gazette Notice 7146 of 2021 is the only subsisting conversion list from the Ministry. Additionally, the Gazette Notice stipulates that all transactions or dealings pertaining to the listed parcels shall be carried out in the new registers from 1st November 2021. As such, the proprietors of the listed parcels will acquire new titles to enable future effective dealings in their properties.

The public has been invited to scrutinize the parcels listed in the Gazette Notice and where a person is dissatisfied with information contained in the Gazette Notice, the grievance mechanisms provided under the Land Registration (Registration Units) Order of 2017 promulgated under section 6 of the Land Registration Act, 2012 are available.

Further, any person aggrieved by the information in the conversion list, or the cadastral maps contained in the Gazette Notice, may lodge a complaint with the Registrar within ninety (90) days of Gazette Notice’s publication. The aggrieved person may also register a caution pending the clarification or resolution of the complaint. Lastly, an aggrieved party may appeal the decision of the Registrar in Court.

From the foregoing, concerned proprietors are advised to exercise vigilance, to peruse and comply with the Gazette Notice in order to facilitate a smooth transition of their respective properties’ records. Members of the public are also advised to peruse the conversion list so as to confirm whether they have any interest in any of the listed parcels. If so, they should promptly liaise with the respective proprietors for the necessary compliance.

Please click here to download the alert.


This alert is for informational purposes only and should not be taken as or construed to be legal advice. If you have any queries or need clarifications with respect to this alert, please do not hesitate to contact Pamella Ager (pamella@oraro.co.ke), James Kituku, Partner (james@oraro.co.ke) or Anna Kandu (anna@oraro.co.ke) or your usual contact at our firm.

Oraro & Company Advocates Receives Top Rankings in IFLR1000’s 31st Edition

Posted on July 30th, 2021

30th July 2021

We are pleased to announce that Oraro & Company Advocates has once again been recognised for its market-leading strength in IFLR1000’s financial and corporate law rankings.

The firm earned the prestigious rankings for providing legal advisory services in the areas of Financial and Corporate, Project Development: Infrastructure, Project Development: Mining, and Project Development: Power.

Additionally, our Founding Partner, George Oraro SC, and Managing Partner, Pamella Ager, have been ranked as ‘Highly Regarded’ lawyers for their expertise in Project development, M&A and Banking, M&A, respectively. The ‘Highly Regarded’ ranking follows consistent positive client feedback and high recommendation by other lawyers as well as a strong transactional track record.

Published by IFLR1000, the guide to the world’s leading financial and corporate law firms, law firm rankings and lawyer ratings are based on three key criteria: transactional evidence, client and peer feedback.

Please see the IFLR1000 rankings on their website here.

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Profile

Established 44 years ago by George Oraro SC (one of Kenya’s top litigators), Oraro & Company Advocates is a top-tier, full-service Kenyan law firm providing specialist legal services both locally and regionally in Arbitration, Banking & Finance, Conveyancing & Real Estate, Corporate & Commercial, Dispute Resolution, Employment & Labour, Infrastructure, Projects & PPP, Restructuring & Insolvency and Tax. The Firm has over the years developed a distinguished reputation which has seen it and its Partners recognised by leading international directories such as Chambers Global, Legal 500 and IFLR1000.

Kipkirui Kosgei

Head of Business Development

T: +254 709 250 000/709 250 735

E: gkosgei@oraro.co.ke

Appealing Tax Appeals Tribunal Determinations at the High Court: Commissioner of Investigations and Enforcement v Grain Bulk Handlers Limited

Posted on July 28th, 2021

Background

In a Judgement delivered on 17th June, 2021 in Income Tax Appeal No. E005 of 2020: Commissioner of Investigations and Enforcement v Grain Bulk Handlers, the High Court dismissed an appeal by the Commissioner of Investigations and Enforcement (“the Appellant”) against the Judgment of the Tax Appeals Tribunal delivered on 18th December 2019.

Issues for determination

The Appellant raised seven grounds of appeal which the Court summarized as follows to arrive at its determination:

  1. Whether the respondent’s appeal before the Tribunal was filed out of time;
  2. Whether the Tribunal erred in finding that the respondent was not an importer and that no tax was payable on terminal tolerance or that the respondent required a destruction certificate or that the respondent was liable for un-customed goods;
  3. Whether the Tribunal erred in finding that the appellant’s documents were inadmissible; and
  4. Whether the Tribunal erred in holding that the assessment against the respondent was similar to that of its Managing Director.

The Court’s analysis & decision

  1. Whether the Appeal filed out of time (suspension of time by consent)

There was undisputed evidence that after the objection decision, Grain Bulk Handlers (“GBH”) filed a Petition in the High Court in Petition No. 239 of 2012 (the Petition) wherein the High Court suspended the 30-day period for filing an appeal and stayed the proceedings of the Committee. The stay orders were thereafter extended by consent of both parties until determination of the Petition. By this action, computation of time stopped and resumed when the High Court determined the Petition.

After the petition, the GBH appealed to the Tribunal, wherein KRA objected to the appeal on the basis that the GBH’s appeal at the Tribunal was time barred. The Tribunal dismissed the objection.

The High Court found that the appeal at the Tribunal was filed within time given that computation of time was stayed by consent of the parties. As a result, the High Court found that this ground of appeal failed.

  1. Whether the GBH was an importer (question of fact in an appeal)

The second ground was that the Tribunal erred in finding that the GBH was not an importer and that no tax was payable on terminal tolerance (grain loss that occurs during transfer from one vessel to another). KRA further claimed that the Tribunal erred in finding that the GBH did not require a destruction certificate or that it was not liable for un-customed goods.

The High Court noted that S. 56 (2) of the Tax Procedures Act limits an appeal to the High Court to questions of law only. The Court further noted that the exception to the rule was that a question of fact can give rise to a question of law on a lower court/tribunal’s misapprehension of evidence which leads to a bad decision.

On hearing the appeal, the Court found that the KRA failed to demonstrate how the Tribunal’s findings on facts were so perverse that it would amount to conversion of a point of fact into a point of law warranting the High Court’s intervention. In addition, the High Court found that the KRA failed to prove that the GBH imported grains as no tangible evidence was adduced in this regard. Further no evidence was adduced by KRA to support their allegation that GBH had sold grains to third parties. To the contrary there was sufficient evidence adduced by GBH to demonstrate that any grains released to third parties were undertaken upon instructions of their clients with whom they had executed Service Provision Agreements. The claim of dealing with un-customed goods was therefore unsubstantiated. As a result, this ground of appeal failed.

  1. Admissibility and weight of evidence (summary of bank transactions)

KRA argued that the Tribunal erred in finding as inadmissible evidence proving that GBH delivered grains to clients who were not importers. On its part GBH submitted that the Tribunal did not declare the said documents as inadmissible but that they fell short of proving the KRA’s claim that income had been earned from sale of grain as had been alleged.

The evidence relied on by KRA in support of the alleged assessment was a banking summary relating to the GBH’s director and not the GBH itself. Further, the Tribunal found that the banking summary did not disclose the relevant bank details, account name, account number or bear a signature.

The Court agreed with the Tribunal as the documents did not prove that income had been derived from the Respondent’s grain sales and held that this ground of appeal failed.

  1. Appeal on an undetermined matter

Lastly, the fourth ground argued by KRA was that the Tribunal erred in holding that the assessment against the GBH was similar to that against the GBH’s director. The Court determined that the Tribunal did not make any such determination in its judgment and stated that the KRA could not appeal on an issue that was never determined by the Tribunal in the first instance. As a result, this ground of appeal failed.

Based on the above, the Judge dismissed KRA’s Appeal in its entirety with costs to the Respondent.

Grain Bulk Handlers Limited was represented at the High Court by our tax team led by George Oraro SC, Founding Partner, assisted by Renee Omondi, Tax Partner, Wanjala Opwora, Associate and Nzioka Wang’ombe, Associate.

Please click here to download the alert.


This alert is for informational purposes only and should not be taken to be or construed as a legal opinion. If you have any queries or need clarifications, please do not hesitate to contact Renee Omondi (renee@oraro.co.ke), Wanjala Opwora (wanjala@oraro.co.ke), Nzioka Wang’ombe (nzioka@oraro.co.ke) or your usual contact at our firm, for legal advice.

Fresh Thinking Webinar on Data Protection: Overview of the Regulations Concerning Data Protection in Kenya

Posted on July 28th, 2021

Fresh Thinking Webinar on Data Protection

Posted on July 23rd, 2021

Tax Appeals Tribunal Rules Apple Concentrate is not a Beverage: Kenya Breweries Limited v Commissioner of Customs & Border Control

Posted on July 19th, 2021

In a Judgement delivered on 25th June, 2021 in Tax Appeal No. 282 of 2020: Kenya Breweries Limited v Commissioner of Customs & Border Control (2020) eKLR, the Tax Appeals Tribunal (the “Tribunal”) allowed an appeal by Kenya Breweries Limited (“KBL”) setting aside the Commissioner of Customs & Border Control Tariff Ruling dated 5th June, 2020. The Tribunal also asserted that the Apple Concentrate that KBL intended to import for manufacturing Tusker Cider, an alcoholic beverage is classifiable under HS Code 2106.90.20 (food preparations) of the East African Community Common External Tariff, 2017 (CET), thus subject to a lower customs rate.

The main dispute between the parties was the classification of the Apple Concentrate (an ingredient used for manufacturing Cider, an alcoholic beverage). KBL’s position was that the concentrate ought to be classified under Chapter 21 (edible preparations) which attracts a duty rate of 10%. On the other hand, the Kenya Revenue Authority (“KRA”) argued that the Concentrate was classifiable under Chapter 22 (beverages, spirits & vinegar), which attracts a duty rate of 25%.

The Law on Classification of Commodities

The East African Customs Management Act, 2004 (“EACCMA) governs customs administration in the East African Community and the CET governs classification of imported goods for the purpose of duty calculation. The CET ought to be interpreted in accordance with the World Customs Organization (“WCO”) General Interpretation Rules for the Interpretation of the Harmonized System (“GIRs”) and the explanatory notes to the CET.

GIR 1 provides that: “The titles of sections, chapters and sub chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative section or Chapter Notes.” Basically, when classifying a commodity, one should first refer to the terms of the headings of that subject then the terms of the Section then the relevant Chapter Notes.

The submissions by the parties

KBL argued, in both its Application for a Tarif Ruling before KRA and before the Tribunal, that the Apple Concentrate was classifiable under HS Code: 2106.90.20 on “Preparation of a kind used in manufacturing of beverages” in Chapter 21 that covers “Miscellaneous Edible Preparation”. KBL through its lead counsel Mr. George Oraro, SC emphasized that KRA ought to have considered the purpose, intended use, and chemical composition of the product in determining the class under which it falls. KBL further emphasized that whereas the Apple Concentrate had an alcoholic percentage of up to 14%, it was not a beverage that could be offered for human consumption in that state thus could not be classified under Chapter 22 of the CET.

KRA, on the other hand, insisted in both its Opinion and Tariff Ruling dated 5th June, 2020 that the product was classifiable under Heading 22.06 on “other fermented beverages (for example, cider, perry, mead, sake) … not elsewhere specified” under Chapter 22 that covers “Beverages, sprits and vinegar”

In KRA’s view, the Apple Concentrate was not classifiable under Chapter 20 (preparations of vegetables, fruit…) or 21 (edible preparations) due to its 14% alcohol content thus classified it under Chapter 22 of the CET. KRA based its position on Explanatory Note (d) to Chapter 20 of the CET that classifies fruit or vegetable juices of an alcoholic strength by volume exceeding 0.5% volume under Chapter 22. Further, KRA argued that the Apple Concentrate was fermented fruit thus classifiable under Chapter 22 that deals with fermented beverages such as cider.

In response to KRA’s arguments, KBL stated that the Apple Concentrate was neither a fruit nor a vegetable thus Explanatory Note (d) did not apply. KBL further argued that it would be unreasonable to insist that the Apple Concentrate is a beverage when it cannot be consumed in its imported state and had to processed to produce Tusker Cider which is fit for human consumption.

The Decision

Having heard the parties, the Tribunal was of the view that GIRs ought to be interpreted in cascading order. GIR 1 is the foremost rule of classification. This means that classification is determined first by the terms of the headings, then the section or chapter notes and other GIRs (if necessary).

The Tribunal further determined that, in establishing the appropriate Tariff Code of a product, one must consider the words of the Section and Chapter titles as a guide and faulted the Respondent for disregarding this basic yet fundamental rule.

Additionally, the Tribunal echoed that in determining classification of products, KRA must give due regard to the purpose and intended use of the product. In this respect, the Tribunal took cognizance of the undisputed fact that the Apple Concentrate was a raw material for manufacturing Cider, an alcoholic beverage. Consequently, the Tribunal found that the Apple Concentrate was not a beverage.

In conclusion, the Tribunal found that KRA had erred in classifying the Apple Concentrate under HS Code 2206.00.10 (Chapter 22) and agreed with the KBL’s argument that the concentrate ought to be classified under HS Code 2106.90.20 (Chapter 21). Accordingly, KRA’s Tariff Ruling dated 5th June, 2020 was set aside and KBL’s Appeal was allowed.

Kenya Breweries Limited was represented at the Tax Appeals Tribunal by our tax team led by George Oraro SC, Founding Partner, assisted by Renee Omondi, Tax Partner, Wanjala Opwora, Associate and Nzioka Wang’ombe, Associate.

Please click here to download the alert.


This alert is for informational purposes only and should not be taken to be or construed as a legal opinion. If you have any queries or need clarifications, please do not hesitate to contact Renee Omondi (renee@oraro.co.ke), Wanjala Opwora (wanjala@oraro.co.ke), Nzioka Wang’ombe (nzioka@oraro.co.ke) or your usual contact at our firm, for legal advice.

Bill Review

Posted on July 13th, 2021

13th July 2021

We are pleased to announce the launch of a new Bill Review portal on our website. Through this portal, we intend to provide useful insights and information on proposed legislation that is under consideration before Parliament. We shall continuously update the resource on a regular basis and provide new content by way of Reviews, Alerts, Articles, Papers and a comprehensive Bill Tracker, from which one can keep tabs with the stage and/or status of the proposed laws.

To visit this new and exciting resource, click the link here.

Kosgei Kipkirui

Head of Business Development

T: +254 709 250 000/735

E: gkosgei@oraro.co.ke

Registration of Business Names (Amendment) Bill, 2021

Posted on July 9th, 2021

Proposed Provision for Amendment Proposed Amendment Our Comments
2 a) Including the following definitions:

    • “address” has the same meaning as assigned under the Companies Act;
    • “alternate address” means an address used by a proprietor of a business that is not his primary address;
    • “board” means the Board of Directors established under section 5 of the Business Registration Service Act;
    • “Certificate” means the certificate of registration issued under section 14;
    • “proprietor” means an individual or corporation who has registered a business name;

b) Providing that a “minor” means a person who has not attained the age of 18

c) deleting the definition of the term “foreign concern”

d) deleting the definition of the term “Registrar” and substituting therefore the following new definition; “Registrar” means the Registrar appointed under the Companies Act;

e) Requiring all persons, when submitting their particulars under the Act, to also submit the particulars of their nationality, without subjecting British subjects only to this requirement.

f) deleting subsection (3), which does not require the disclosure of name changes of individuals before they attained the age of 2 years.

If passed, the proposed definitions would provide some much-needed clarity when it comes to the interpretation of these terms under the Act. As the Act commenced on 29th September 1951, it is expected that its provisions might be out of line with legal and other developments, which requires them to be updated. For example, an amendment to the meaning of the word “minor” is overdue.

An amendment to redefine the term “Registrar” is similar to the amendment proposed in the Movable Property Securities (Amendment) Bill, 2021 and is an effort to bring most matters to do with business registration and regulation in the purview of one public office.

As Kenyans no longer consider themselves British subjects, the requirement for only such persons to disclose their nationality is outdated.

 

3 The Bill proposes to have the Deputy Registrar and every Assistant Registrar appointed pursuant to section 831(3) of the Companies Act be the Deputy and Assistant Registrars of Business Names. The Registrar is obliged to keep and maintain a register in the prescribed manner, in which shall be entered the particulars required under the Act. This is an effort to streamline and centralise services related to business entities to make them effective and avoid duplication of similar roles by having one body serve this purpose.
4 a) The Bill proposes to delete all references to “firm individuals and corporations” and substitute them with “proprietors” in the section.

 

 

b) Delete the word “administrative receiver” immediately after the term “administrative”.

Replacing the words “firm individuals and corporations” with the term “proprietors|” is a means of providing clarity as this term is defined in the proposed amendment of section 2. Further, firm individuals and corporations may refer to artificial persons yet there is a shift towards identifying the natural persons who own business entities. The proposed amendment is in line with that policy.

There is no mention of “administrative receiver” in section 4.

5 The Bill proposes to delete section 5, which provides for registration by nominees i.e., that if a nominee or trustee wholly or mainly carries on business for firms, individuals or corporations with a place of business within Kenya or act as general agents of any foreign firm, the business is to be registered under the Act. The section also exempts businesses carried on by a trustee in bankruptcy or a receiver manager appointed by any court from having to register under the Act. Persons carrying out business in Kenya are required to be registered under the Act in any case, hence deleting this section would rid the Act of unnecessary sections.
6 The Bill proposes to delete and substitute section 6 with another new section setting out the particulars that proprietors under the Act are to submit when seeking to register their business. The particulars are:

    • The business name
    • Concise description of the true nature of the business
    • The address of each place where the business is to be carried on
    • The given names and the usual place of residence of each applicant who is an individual, and the corporate name and the place of incorporation office of each applicant that is a corporation
    • The full address of every other place of business
    • Alternate address of the proprietor
    • Proposed date of the commencement date of the business; and
    • Such other information concerning the Business Name as may be required by the Registrar

If the business is carried on under two or more business names, each of those business names are to be stated.

On receipt of a statement of particulars, the Registrar is to enter the firm, individual or corporation in the register subject to section 17.

The proposed particulars are clearer as compared to those currently in the Act. The particulars also indicate favouring increased disclosure for businesses. This is to ensure accountability for the actions of business proprietors. For example, the requirement for a concise description of the true nature of the business to be carried on in the business name is currently phrased as a requirement to disclose the general nature of the business under the Act.
6A The Bill proposes to clothe the Registrar with the power to require any document to be lodged or issued electronically under the Act. The Registrar may allow the document to be lodged by an agent of the person required to lodge it, subject to any conditions that the Registrar may impose from time to time.

A copy of a document lodged electronically with the Registrar purported to be certified by the Registrar as a true copy of the original document is, in the absence of evidence to the contrary, admissible in all legal proceedings as proof of the original document.

This would give legitimacy to documents lodged electronically with the Registrar, hence avoiding the need to subject them to strict proof. This is also an indication that electronic documents are increasingly being recognized as legitimate documents.
8 Deletion and substitution.

The Bill proposes to allow for the registration of a Business Name after a business has commenced and further obliges persons responsible for a business to apply to the Registrar for the registration of the business within 30 days from the date of the commencement of the business.

 

The current section 8 provides for furnishing of all statements of particulars under the Act within twenty-eight days of the business commencing. The proposed amendment, if passed, would give business proprietors an additional two days to comply with the registration requirement.

9 The Bill proposes that if a change is made or occurs in any of the particulars registered in respect of any proprietor of a business or of the business, that proprietor or the person responsible for the business shall submit to the Registrar in the prescribed form the particulars of the change within 30 days after the change occurs.

The relevant particulars may include a change in the general nature of a business; addition or removal of a proprietor; name of a business; or address of the proprietor or of the principal place of the business or any other place where the business is carried out.

The Bill also proposes to authorise the Registrar to request for particulars from individuals or their authorised agents as necessary to ascertain whether the individual should be registered under the Act or whether any alteration in the registration particulars should be made. Further, the Registrar may require any such particulars to be verified by a statutory declaration.

Once the application for the change of particulars of a business name are approved, the Registrar shall issue a certificate of change of particulars.

The amendment, if passed, would give business proprietors an additional two days to comply with the registration requirement as compliance is currently required within 28 days.

The increased disclosures are indicative of a move toward business transparency in Kenya, more so when it comes to the identity of the proprietors of a business.

There also seems to be a need to increase the veracity of particulars asserted through request of particulars or verification via a statutory declaration.

It is not clear what happens after an existing certificate of registration is cancelled. Would it mean that the certificate of change of particulars is what is to be used henceforth in place of the certificate of registration? There is need for clarification as to what happens when an existing certificate of registration is cancelled; and whether the certificate of change of particulars will take the place of the certificate of registration.

 

10 The Bill proposes to make it an offence to fail to furnish a statement of particulars for a notice of any change in particulars without reasonable excuse in the manner and within the time specified. The sanction is KES 20,000 or the Court shall order a statement of the required particulars or notice of the change in particulars to be furnished to the Registrar within such time as may be specified in the order or to both.

Where a person submits particulars that they know is false or authorizes or permits the submission to the Registrar such a statement commits an offence and on conviction is liable to a fine of KES 100,000 or to imprisonment for a term of three years, or to both.

The use of the word “for” seems to be the result of a grammatical error, since the word “or” would make better sense of the clause.

The threatened sanctions are intended to act as deterrents of non-compliance. This proposed amendment provides harsher sanctions for failure to comply compared to the current provision in the Act, which imposes a court order requiring compliance from the defaulter as may be specified in the order. Perhaps this sanction was not as effective at ensuring compliance and strenuous measures are needed.

12 Deletion and substitution.

The Bill proposes to impose penalties for signing or submitting to the Registrar a statement or particulars made or purporting to be made for the purpose of the Act, that to his knowledge is false or authorizes or permits the submission to the Registrar such a statement or particulars that to their knowledge is false. Such actions constitute offences and on conviction, an individual would be liable to a fine of KES 100,000 or imprisonment for a term of three years, or to both.

 

This would be an enhancement of the penalty for making false statements, which is currently an imprisonment for a term not exceeding twelve months or to a fine not exceeding KES 2,000 or to both. Enhancing penalties is meant to encourage more compliance through deterrence and punitive action in case of default. Should it pass, only time will tell if it would have the desired effect.

13 Deletion.

The section provides for the Registrar’s power to require an individual to furnish him or her with particulars that are necessary to decide whether a business should be registered under the Act.

 

The proposed amendment is acceptable since more comprehensive provisions on the power of the Registrar to require an individual to furnish him or her with particulars is adequately provided for in the proposed section 6A.

14 Deletion of subsection (2)

Amendment of subsection (3)

The Bill proposes to remove the requirement of the Registrar to issue a fresh certificate in the prescribed form after any change in the particulars is made.

The Act requires persons of all nationalities other than those of British nationality from indicating their nationality on the certificate issued by the Registrar upon registration under the Act. The Bill proposes to remove this exception such that the nationality of all partners and individuals will be indicated in the certificate.

The Act requires the minority of minors to be shown on the certificate the Registrar issues. The Bill proposes to remove this requirement.

 

 

The Bill proposes to have the Registrar under its proposed section 9 to issue a certificate of change of particulars and cancel the certificate issued upon registration. Therefore, the section providing that the Registrar issue a fresh certificate must be removed from the Act should it pass.

The removal of the two latter exceptions is to avoid discrimination, which is not permitted under Article 27 of the Constitution, which prohibits discrimination based on age and nationality, among others.

14A Insertion

The Bill proposes to enhance the effect of registration of a business to include the entitlement of every person whose business name has been entered in the register to adopt and use the registered business name.

Further, a certificate of registration or a certified copy of any entry in the register in respect of any business name is to be prima facie evidence of the truth of the facts stated therein. However, the admission of such evidence shall not prevent any person who is not registered as such from proving that they are nevertheless an associate of a business.

 

This proposal increases the value of registering one’s business in that it includes all persons whose business name has been registered.

Giving prima facie high probative value to certificates of registration or certified copy of entries in the register in respect of any business would be a way of avoiding a situation of having to subject them to strict proof on the first instance. This can save time in proceedings as well as give legitimacy to the documents issued by the Registrar.

 

14B

Insertion

The registration of a business name is proposed to remain in force for a period of three years, but the registration may from time to time be renewed by lodging with the Registrar, at any time within the period of one month before or after the expiry of the registration, a statement in the prescribed form signed by the person or an authorized agent and upon payment of the prescribed fee. The Registrar will only accept this from only the person in relation to whom the business was registered. If the Registrar refuses to renew any registration, the Registrar shall notify the applicant in writing of the decision.

Upon the expiry of three years from the date of registration or last renewal of a Business Name, the Business Name shall be deemed to be deregistered. The last certificate of registration and the Business Name shall be cancelled from the register.

If a person is aggrieved by a decision of the Registrar, they may appeal to a court of competent jurisdiction.

 

These consequences are geared at ensuring compliance on the part of the proprietors of a business. They also increase the regulation of business entities for the purpose of accountability.

 

15(3)

Section 15(3) of the Act provides for a period of twelve weeks within which a firm, individual or corporation must respond to the Registrar’s notice to confirm whether they are still in business. The Bill proposes to change this period to three months. This amendment does not seem to introduce any substantive change given that three months is equivalent to twelve weeks.
 

15A

Insertion

The Bill proposes a reprieve for persons whose registration has been cancelled. This is through an application to the Registrar to restore a business name that has been struck off, on the ground that the applicant was carrying on business or in operation at the time of striking off of the business name. The application is accompanied by registration documents relating to the business.

An application may be made even if the business has in consequence been dissolved. It is to be made only by a former partner of the business in such a case and not be made after the expiry of six years from the date on which the business was dissolved.

 

Given the automatic consequence of being struck off the register for failing to make the requisite statement and paying the prescribed fee set out in the proposed section 14B, a reprieve for businesses is welcome to ensure that they can be restored to the register upon compliance.

It is also interesting to note that this option is available for businesses that have since been dissolved. This makes it possible for businesses to start over without having to restart the registration process all over again.

17 Deletion and substitution

The Bill proposes to prohibit the registration of a business name if the use of the name would constitute an offence; the name consists of abbreviations or initials not authorised by or under the Act or the Registrar is, after considering the relevant criteria, of the opinion that the name is offensive or undesirable. The relevant criteria is to be as prescribed by the regulations.

 

This proposed deletion and replacement of section 17 would ensure that there is more discretion on the part of the Registrar to consider names rather than working within the five criteria provided for under the Act that may limit the Registrar’s discretion. Further, the classification of the prohibitions would also help persons who want to register business names to understand the parameters of acceptability. Regulations to elaborate on the same would be a welcome change.

17A Insertion

The approval of the Registrar is required where the name of a company to be registered under the Act suggests a connection with a state organ, a county government or any public authority prescribed by the regulations.

 

Limiting this to companies only is curious at best but generally seems to be an oversight on the part of the drafters of the Bill. If passed, it should apply to all business entities under the purview of the Act.

17B Insertion.

The Registrar may require an applicant in who proposes to use a business name that resembles that of a public body to seek the authority of a state organ or any public entity specified in the Regulations for the use of a specified name in the Regulations, who may veto the use of the name but only on reasonable grounds.

 

The aim is to prevent business entities or individuals from using names that may result in confusion between government agencies and business entities.

 

17C

Insertion

The proposed section provides that the regulations may permit or prohibit the use of certain characters, signs or symbols including accents and other diacritical marks that may be used in the name of a business name to be registered under the Act.

The regulations may specify a standard style format for the name of a business for the purpose of registration.

The regulations may also prohibit the use of specified characters, signs or symbols when appearing in specified positions at the beginning of a name.

The Registrar may not register a company by a name that consists of or includes anything not permitted in accordance with the regulations.

 

This provision gives the Registrar some discretion in deciding what names are acceptable and which are not, rather than giving mandatory compliance requirements.

17D Insertion

The Registrar may refuse to register a business if:

  • its name is the same as, has a close phonetic resemblance to, is identical to, or closely resembles that of another name reserved or registered by the Registrar or of a dissolved business entity or one that has been struck off the Register;
  • it differs from the name of another business name or other entity only by the addition of a name of a place, locality or region within Kenya;
  • it is the same as a name of a body corporate or established under a written law; or
  • the Registrar believes on reasonable grounds that its use would involve the commission of a criminal offence or that is offensive or undesirable or contrary to public interest.
 

These provide adequate guidelines for business owners seeking to register the names of their business. Further, the provision also gives the Registrar discretion in deciding such matters.

 

17E

Insertion

The Bill proposes to empower the Registrar to direct a change of a business name in writing where it has been registered by a name that is the same as or in the opinion of the Registrar, too similar to a name appearing at the time of the registration in the Registrar’s index of company names; or a name that should have appeared in the index at that time.

The Registrar is to specify the period within which the business would be required to comply with the direction. If the business does not comply with this direction, the Registrar shall cancel the entry in the register relating to such proprietor.

 

The proposed amendment would give the Registrar discretion to decide the question of the appropriateness of a business name. Further, in as far as it applies to past entries in the register, this proposed amendment, if passed would give the Registrar an opportunity to remedy such occurrences.

Presumably 17F The proposed amendment is not numbered.

If a proprietor is dissatisfied with the Registrar’s direction to change its name in case of a similarity, they may apply to the Court to quash the direction within 21 days after the date on which the direction is notified to the Company. On hearing the application, the Court may either quash or confirm the direction. If the direction is confirmed, the Court shall specify the period within which the proprietor is required to comply with the direction.

The proposed amendment should be numbered.

If passed, this would give business proprietors recourse to court in case of an unreasonable exercise of discretion on the part of the Registrar.

23 Deletion of subsections (2) and (3)

The Act requires the publication of the true names of every individual, including, in the case of a married woman, an obligation to indicate whose wife they are. Further, minors are also required to publish their minority. This publication is mandatory in all trade circulars and business letters on which the business name appears and are issued or sent by the firm, individual or corporation or to any person in legible Roman letters.

 

These discriminatory provisions are not adhered to in practice, and it is time that the Act catches up with the Constitution and consensus in the business world. A step in the right direction.

25 Deletion and substitution with a new section 25

The Bill proposes to provide for a general penalty for when an offence is committed, and a person is found guilty but there is no penalty prescribed in the Act. The proposed general penalty is a fine not exceeding KES. 100,000 or imprisonment for a term not exceeding one year, or to both.

 

The Act currently prescribes a fine not exceeding KES 1,000 and in default of payment, an imprisonment term not exceeding three months. Perhaps the drafters found this to be not enough of a deterring factor and are seeking to increase its deterrent effect.

 

26

Deletion

The Bill proposes to delete the section that provides for the jurisdiction of subordinate courts of the first and second class in trying the offences provided for under the Act.

 

The Magistrates Court Act, 2012 provides for a different classification of the Magistrates Courts as well as their jurisdiction. There is thus no need for the Act to provide for this, especially where its provisions are outdated.

Movable Property Securities (Amendment) Bill, 2021

Posted on July 9th, 2021

Proposed Provision for Amendment Proposed Amendment Our Comments
19 Insertion of subsection 2A, which states that the Registrar shall be the Registrar of Companies appointed under section 831 of the Companies Act, 2015.

Deletion of subsection 3 meaning that the Board of Service will not be the body to appoint the Registrar and the other staff of the Registry.

Since the services relating to the Act are accessed through the e-citizen platform, having all the services provided by one body would hopefully make processing of requests faster. Further, it would hopefully streamline the services to make them effective and avoid duplication of similar roles since only one body would be in charge.
23 Renumbering the existing provision as (1) and then inserting a subsection (2) immediately after it providing that the fees received by the Registrar under the Act shall be the funds of the Service i.e. The Business Registration Service under the Business Registration Service Act, 2015. Currently, the Act does not provide for what is to be done with the fees received under the Act. Making this amendment would provide a means of accountability for the funds received under the Act.

The Finance Act, 2021 – Breakdown and Analysis

Posted on July 8th, 2021

The Finance Act, 2021 (the Act) was assented to by the President and passed into law on 29th June 2021.

We are pleased to share with you, our views and comments on the salient changes that the Act has introduced below.

INCOME TAX ACT, CAP 470

Provision Amended   Amendment Our Comments
S.2(a) Amends Section 2 of the ITA

Inclusion of the definition of “control” in scenarios where:

  • a person holds at least 20% of the voting rights of a company whether directly or indirectly;
  • a person advances a loan facility constituting at least 70% of the total book value of the assets of a company or guarantees 70% of the total debt of the debtor (excluding loans from unrelated financial institutions);
  • a person appoints more than half of the board of directors of another entity or at least one director or executive member of the governing board of that entity;
  • a person owns intellectual property rights which a company wholly depends on in the manufacture or processing of goods or articles carried on by the person;
  • a person who supplies at least 90% of the sales of an entity and upon assessment by the Commissioner, the person influences the price or other conditions relating to the supply or purchases by the other person;
  • a person who purchases or designates a person to purchase at least 90% of the sales of another person and upon assessment, the Commissioner deems influence in the price or any other conditions of the sales of another person;
  • a person who has any other relationship, dealing or practice with another person that the Commissioner may deem to constitute control.
The term “control” was previously defined under the Second Schedule of the Income Tax Act to mean the holding of 25% or more of the shares or voting rights within a company. The provision was subsequently deleted by the Tax Laws (Amendment) Act, 2020. This amendment is geared towards reintroducing the definition of the word “control” and expanding its scope in light of the introduction of beneficial ownership disclosure under the Companies Act. It, therefore, expands the scope of those in control of a company from ordinary shareholders to include suppliers, financiers, guarantors and even consumers provided that they exercise control in companies.

Additionally, a related company that supplies another company with at least 90% of its sales will have to comply with the transfer pricing rules under the Income Tax Act.

Further, the last amendment gives the Commissioner a wide discretion to determine what constitutes control of another person. This creates a level of uncertainty for taxpayers on the criteria used for determination of control.

These amendments will affect the application of the law on thin capitalisation and transfer pricing to include a wider range of transactions between related parties which were not clear or expressly provided for thus widening the taxable income base.

Introduction of the definition of “infrastructure bond” to mean a bond issued by the government for the financing of a strategic public infrastructure facility including a road, hospital, port, sporting facility, water and sewerage system, communication network or energy project. This will improve certainty for potential investors  whose listed bonds are infrastructure bonds, hence exempt them from paying income tax on the accruing interest.

For purposes of taxation, it is extremely useful and necessary to have express definitions for avoidance of doubt and to provide clarity.

The amendment redefines a “permanent establishment” (PE) as follows:

paragraph (a) has expanded the definition to include a warehouse (in relation to persons providing storage facilities to others), a farm, plantation or any other place where agricultural, forestry plantation or related activities are carried on as well as a sales outlet;

paragraph (b) includes a building site, construction, assembly or installation project or any supervisory activity connected thereto, only if it continues for a period of more than one hundred and eighty-three days;

paragraph (c) lists the provision of services (including consultancy), through employees or other persons only where such services are related to business in Kenya for an aggregate period of at least 91 days in any 12-month period or ending in the year of income concerned;

paragraph (d) also classifies an installation/structure used in the exploration of natural resources for a period of not less than ninety-one days as a PE;

paragraph (e) also includes a dependent agent of a principle for activities the principal undertakes in Kenya (including habitually concluding contracts, playing the principal role leading to the conclusion of contracts without material modification by the person).

A fixed place of business through which business is wholly or partly carried on; and a building site, construction, assembly or installation project or any supervisory activity connected to the site or project, but only if it continues for a period of more than 183 days.

Paragraph (a) expands the definition of a PE to include sales outlets, farms, plantations or any place where related activities are carried out irrespective of the duration of activity.

Paragraph (b) seeks to quell the mischief of persons carrying out building & construction projects in Kenya:

a.  using different related entities for short periods each to avoid being deemed to be operating in Kenya for more than one hundred and eighty-three days; or

b.  by carrying out projects intermittently using a single entity to avoid carrying out business for a continuous period of one hundred and eighty-three days.

By deeming such to be PEs for purposes of income tax.

Paragraph (c): Service provision for an aggregate of 91 days in any 12-month period shall be regarded as a PE. This will affect the way non-resident service providers do business with resident entities.

Paragraph (d):Installations/structures used in natural resource exploration are now PEs if they are up for a period exceeding ninety-one days.

Paragraph (e): Non-residents acting through local agents to habitually conclude business in Kenya shall be deemed to have a PE in Kenya.

However, the determination of a PE excludes certain activities of a preparatory or auxiliary character.

S.3 The Act expands the scope of income to be subject to income tax by including income accrued from business carried out over the internet or electronic networks, including through a digital marketplace. This amendment subjects income from business carried out online to income tax. Previously, only income from a digital marketplace was subject to income tax.
The Act now defines a “digital marketplace” as an online or electronic platform which enables users to sell or provide services, goods or other property to other users. The amendment brings certainty as to what constitutes a digital marketplace.

However, the Digital Marketplace Regulations have not yet been enacted. Therefore, there is no clear mode of collecting taxes accruing from a digital marketplace.

S.11 The Act introduces section 11(3A) to the Income Tax Act to require the application of section 11(3) to registered trusts in the following instances:

a) any amount paid out of the trust income on behalf of any beneficiary and is used exclusively for the purpose of education, medical treatment or early adulthood housing;

b) income paid to any beneficiary which is collectively below Kshs. 10 million in the year of income;

c) such other income as may be prescribed by the Commissioner from time to time and at such rate as prescribed in paragraph 5 of the 3rd Schedule.

This amendment exempts all amounts paid out by a registered trust (to or on behalf of a beneficiary) except for:

a.  payments from the trust for the exclusive purpose of education, medical treatment or early adulthood housing;

b.  income paid to a beneficiary that amounts to less than KES ten million per year of income;

c.  any other amount prescribed by the Commissioner.

The amendment has restricted the applicability of income tax payments out of a registered trust that meet the above conditions. This will ultimately reduce tax collections on payments by trusts to beneficiaries. This amendment may be erroneous.

S. 12D The Act introduces subsection (1A) to exempt the following persons from paying minimum tax:

a) persons engaged in business whose retail price is controlled by the Government;

b) persons engaged in insurance business;

c) persons engaged in manufacturing and their cumulative investment in the preceding 4 years from assent is at least KES. 10 billion shillings;

d) persons licensed under the Special Economic Zones Act, 2015; and

e) persons engaged in distribution business with income based solely on a commission.

This amendment is a welcome move seeking to exempt the following persons from payment of minimum tax:

a.  businesses whose retail price is regulated by the government e.g. petrol stations;

b.  those in insurance business e.g. agents & brokers;

c.   manufacturers who have invested a sum of at least KES ten billion within the preceding four years;

d.   Special Economic Zone (SEZ) operators; and

e.   distributors who earn only commissions.

S.12E The Act states that non-resident persons whose income is derived or accrues in Kenya through a business carried out over the internet or an electronic network including a digital marketplace shall be subjected to Digital Service Tax (DST). Such non-resident persons shall be required to remit the DST on or before the twentieth day of the following month. Additionally, income subject to Withholding Tax shall not be further subjected to DST. This amendment restricts the applicability of Digital Service Tax (DST) to non-residents.

The amendment further provides that DST returns are to be filed and DST paid before the twentieth day after the end of the month when the service was offered (similar to the filing deadline for VAT, WHT and excise duty).

However, DST shall not apply to income subject to WHT or income from provision of radio, television or internet services.

S. 15 The phrase assigning the meaning of “control” as per the Second Schedule of the Act is deleted.

The Act also removes the cap of 10 years for offsetting taxable losses to an indefinite period.

For purposes of Section 15, “control” shall take up the definitions listed in Section 2 above. This expands the definition of control and creates consistency in its definition.

This amendment removes the 10-year restriction on carrying forward tax losses, thus enabling businesses to infinitely carry forward business losses.

S. 16 The Act prohibits payment of gross interest to related persons and third parties exceeding 30% of earnings before interest, taxes, depreciation and amortization (EBITDA) of the borrower in any financial year. Further, any income exempt from tax is proposed to be excluded from the calculation of EBITDA.

The above provision shall apply to interest on all loans; payments that are economically equivalent to interest; and expenses incurred in connection with raising the finance.

Thin capitalization will now be determined by the total value of loans as a percentage of EBITDA, a change from the previous position where loans were compared to the total equity in the balance sheet.

This will change the thin capitalisation rule of debt-to-equity ratio of 3 to 1 to a restriction of payment of gross interest at not more than 30% of EBITDA. Related companies that are thinly capitalised will have to make necessary adjustments based on EBITDA. This amendment also encompasses any payments equivalent to interest, thereby sealing the loopholes resulting from persons declaring interest in other forms/classifications.

However, banks and financial institutions licensed under the Banking Act and Micro and Small Enterprises registered under the Micro and Small Enterprises Act, 2012 shall be exempt from this provision.

The Act introduces a new paragraph (ja) to Section 16 (2) to prohibit deductions on deemed interest where the person is controlled by a non-resident person alone or with not more than four other persons where the company is not a bank or financial institution licensed under the Banking Act. This provision already existed in Section 16(2)(j) and the amendment is for clarity purposes only.
S.18B The Act requires an ultimate parent entity of a multinational enterprise group to submit a return to the Commissioner describing the group’s financial activities in Kenya, where its gross turnover exceeds the prescribed threshold, and in all other jurisdictions where the group has a taxable presence.

The information to be provided in the returns include the amount of revenue, profit or loss before income tax, income tax paid, income tax accrued, stated capital, accumulated earnings, number of employees and tangible assets other than cash or cash equivalents regarding each jurisdiction in which the group operates.

Ultimate parent companies (that exceed a turnover threshold set by the Commissioner) must now file annual returns that include all the group’s financial activities in all other jurisdictions where the group has a taxable presence.

This will give the Revenue Authority first hand access to information on related parties.

S. 25 The Act refines the definition of the term “settlement” to include the phrase “through a registered family trust”. This amendment clarifies that registered family trusts are subject to income tax similar to other trusts.
S. 26 The definition of the term “settlement” is amended to include the words “other than a registered family trust” immediately after the word “covenant”. This excludes registered family trusts from the provisions of Section 26. As a result, income earned by a trust shall not be deemed as the taxable income of the creator of the trust.
S.31 Provision of insurance relief for contributions made to the National Hospital Insurance Fund (NHIF).

 

NHIF contributions shall now be allowable as insurance relief for resident individuals in their income tax returns, thus equalizing all tax payers when claiming relief on insurance.
S.39B Employers who engage at least 10 graduates from technical and vocational education and training as apprentices for a period of 6 to 12 months shall now also be eligible for a tax rebate the following year after such engagement. The amendment is meant to widen the scope of apprenticeship tax rebates to include employers offering 6–12-month apprenticeships to graduates from Technical and Vocational Education and Training (TVET) institutions, thus encouraging them to not only engage university graduates as apprentices but also graduates from TVETs.
S.41 The Act deletes the current section 41 of the Act and replaces it with a new section 41 that provides that any special arrangement for relief from double taxation between Kenya and another country shall have effect in relation to income tax and the said agreement shall be subject to the provisions of the Treaty Making and Ratification Act, 2012.

Additionally, where the agreement provides that the income derived from Kenya is exempt or excluded from tax, or the application of the arrangement results in the reduction of the rate of tax in Kenya, the arrangement shall not apply unless 50% or more of the underlying ownership of the entity is held by a person in the contracting state for the purposes of the agreement. However, this provision shall not apply if the resident of the other contracting state is a company listed in the stock exchange of the contracting state.

DTAs shall now come into effect upon compliance with the requirements of the Treaty Making and Ratification Act (parliamentary approval). This is a change from the previous position where DTAs came into effect upon issuance of a Notice by the Minister in charge of finance.
S. 41A The Act amends the provision by deleting the words “specified in the notice being arrangements”. This is an administrative amendment following the removal of the requirement of a Notice by the CS for a DTA to come into force.
S. 133 Subsection (6) of the section has been amended to extend the duration of application of paragraph 24E of the Second Schedule to 31st December 2022. The extension is as a result of the ongoing construction of the Standard Gauge Railways which entitles the making of deductions due to the ongoing works.
The Act amends section 133 by including subsection (7) which stipulates that subject to the provisions of section 12 of the Act, any investment allowance shall be claimed on a straight-line basis. The mode of calculating written down values for purposes of investment allowance shall be straight-line only. This allows persons investing to claim investment allowance within a shorter period.
Paragraphs 36, 57 and 58 of the 1st Schedule Paragraph 36 is amended by inserting sub-paragraph (g) to include property, including investment shares, which is transferred or sold for the purpose of transferring the title or the proceeds into a registered family trust. The following income tax exemptions have been added under the 1st Schedule to the ITA:

a.  property transferred or sold by an individual for the purpose of transferring them to a registered family trust;

b. income of a registered family trust;

c.  capital gains resulting from transfer of immovable property t a family trust.

The amendment expands the scope of income exempt from income tax to dealings relating to registered family trusts.

Inclusion of paragraph 57 to exclude the income or principal sum of a registered family trust.
The Act has included paragraph 58 to exclude capital gains relating to the transfer of title of immovable property to a family trust.
Paragraph 1 of the 2nd Schedule

 

The Act amends the Investment Allowance rates. The words “on a reducing balance” have been deleted and replaced with the words “in equal instalments” under sub-paragraphs (a), (b), (c) and (d) of Paragraph 1 to the 2nd Schedule.

 

Investment deduction (ID) on commercial buildings, machinery & purchase/acquisition of indefeasible rights to a fibre-optic cable by a telecommunications operator shall be on a straight-line basis; a change from reducing balance. However, the allowance rates on the same will not change.

In addition, ID will now be allowable on exploration machinery whether or not such operations are being carried out under a mining right.

The amendment also includes machinery used for electricity production whether or not the electricity is supplied to the national grid.

The amendment has also defined:

a.  civil works for purposes of ID. This definition is inclusionary and thus to the benefit of taxpayers.

b. Farm works for the purposes of ID are now defined in the Act.

Paragraph 1A of the 2nd Schedule The Act introduces paragraph 1A to the 2nd Schedule to stipulate that the investment deduction shall be at 100% in the following circumstances:

a) where the cumulative investment value in the preceding 3 years outside Nairobi County and Mombasa County is at least 2 billion shillings;

Provided that where the cumulative value of investment for the preceding 3 years of income was 2 billion shillings on or before the 25th April 2020 and the applicable rate of investment deduction was 150%, that rate shall continue to apply for the investment made on or before 25th April, 2020.

b) where the investment value outside Nairobi County and Mombasa County in that year of income is at least 250 million shillings; or

c) where the person has incurred investment in a special economic zone

ID shall be allowed at 100% on investments outside Nairobi & Mombasa counties if such investment is cumulatively at least KES Two Billion for the preceding three years.

However, where such investment cumulated to at least KES Two Billion for the three preceding years before 26th April 2020, an ID rate of 150% shall continue to apply on investments made before 26th April 2020.

ID shall be allowed at 100% for investments outside Nairobi & Mombasa counties if they amount to at least KES Two Hundred and Fifty Million in that year of income.

ID shall be allowed at 100% on investments in an SEZ.

S. 133 a) subsection (6) is amended by deleting the expression “31st December, 2021” and substituting therefor the expression “31st December, 2022”;

b) the following new subsection has been inserted immediately after subsection (6)

“(7) Subject to the provisions of section 12 of this Act, any investment allowance on any written down values as at the date of commencement of this Act, shall be claimed on a straight-line basis.”

This extends the applicability of ID on construction of bulk storage & handling facilities for SGR support to 31st December 2022 from the previous cut-off date of 31st December 2021.

The above-mentioned ID is at 150%.

Subject to S. 12 of the ITA, any ID is to be claimed on a straight-line basis.

Paragraph 5 of the 3rd Schedule The Act introduces sub-paragraph (jb) to apply a rate of 25% income tax in respect to the disbursement of deemed income under section 11(3)(c) of the Act. Income tax rate on payments from a trust to a beneficiary in the form of annuities or other such payments designated to be paid free/net of tax shall be 25%.
9th Schedule

 

The provisions on the taxation of the extractive industries have been amended as follows:

a) reduction in the rate of depreciation for machinery first used to undertake operations from 100% to 50% in the first year of use and 25% per year, in equal instalments;

b) reduction in the rate of depreciation for machinery first used to undertake exploration activities from 100% to 50% in the first year of use and 25% per year, in equal instalments;

c) increase in withholding tax for non-resident subcontractor for the provision of services to either a licensee or a contractor from 5.625% to 10%;

d) reduction of the deductible withholding tax by a contractor in cases of management, training or professional fees from 12% to 10% of the gross amount of the management or professional fees payable.

This amendment is to ensure conformity of ID rates by reducing ID on prospecting & exploration equipment from 100% to 50% in the first year and 25% per year on a straight-line basis (as per the 2nd Schedule).

WHT on service fees due to non-resident contractors by licensees and contractors in mining/petroleum operations has been increased from 5.625% to 10%.

WHT on payments to non-resident contractors with a PE in Kenya for management & professional services has been reduced from 12.5% to 10%.

 

 

 

Para 18 of the 9th Schedule The amendment deletes it and replaces it with the following new paragraph:

“The provisions of section 16(2)(j) shall apply to a contractor or a licensee.”

Thin cap provisions on deductibility of interest shall apply to contractors and licensees.

Please click here to read the full alert.


The content of this alert is for general information purposes and should not be relied upon without seeking specific legal advice on the matter. If you have any queries or need clarifications, please do not hesitate to contact Renee Omondi (renee@oraro.co.ke), Wanjala Opwora (wanjala@oraro.co.ke ) and Nzioka Wang’ombe (nzioka@oraro.co.ke), or your usual contact at our firm for legal advice relating to the Finance Act and how the same might affect you.

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