Questions you shouldn’t ask anyone
The Income Tax Act is a comprehensive statute that focuses on the various rules and regulations that govern taxation in the country. It provides for levying, administering, collecting, and recovering income tax for the Kenyan government.
There are several terms used in this act that any citizen should be aware of, such terms are.
Accounting Period
It is the period for which that person makes up the accounts of his business.
Agency fees
This means payments made to a person for acting on behalf of any other person or group of persons, or on behalf of the Government and excludes any payments made by an agent on behalf of a principal when such payments are recoverable.
An authorized tax agent
Any person who prepares or advises for remuneration, or who employs one or more persons to prepare for remuneration, any return, statement or another document with respect to a tax under this Act; and for the purposes of this Act, the preparation of a substantial portion of a return, statement or another document shall be deemed to be the preparation of the return, statement or another document.
Compensating tax
Compensating tax means the addition to the tax imposed under section 7A of income tax.
Consultancy fees
Consultancy fees mean payments made to any person for acting in an advisory capacity or providing services on a consultancy basis.
Contract of service
Contract of service means an agreement, whether oral or in writing, whether expressed or implied, to employ or to serve as an employee for any period of time and includes a contract of apprenticeship or indentured learner ship under which the employer has the power of selection and dismissal of the employee, pay his wages or salary and exercises general or specific control over the work done by him; and for the purpose of this definition an officer in the public service shall be deemed to be employed under a contract of service.
Corporation rate
Corporation rate tax rate specified in paragraph 2 of Head B of the Third Schedule of the income tax act.
in relation to income charged to installment tax, means the year of income for which the installment tax is payable.
Defined benefit registered fund
It means a registered fund that contains a defined benefit provision, whether or not it also contains a defined contribution provision.
Incapacitated person
An incapacitated person means a minor, or a person adjudged under any law, whether in Kenya or elsewhere, to be in a state of unsoundness of mind (however described).
Individual rates
Its individual rates of income tax are specified in paragraph 1 of Head B of the Third Schedule
Non-resident rate
it’s a non-resident tax rate specified in paragraph 3 of Head B of the Third Schedule.
Notice of objection means a valid notice of objection to an assessment given.
permanent establishment
A fixed place of business through which business is wholly or partly carried on and includes a place of management, a branch, an office, a factory, a workshop, a mine, an oil or gas well, a quarry, or any other place of extraction or exploitation of natural resources, a warehouse in relation to a person whose business is providing storage facilities to others, a farm, plantation or other places where agricultural, forestry plantation.
qualifying institution
Qualifying institution means a bank licensed under the Banking Act or an insurer registered under the Insurance Act, or such other financial institution as may be approved under the Retirement Benefits Act, 1997.
Registered venture capital company means a venture capital company registered by the Commissioner in such manner as may be prescribed.
Return of income
Return of income means a return furnished by a person consequent upon a notice served by the Commissioner under section 52, it including a return of income together with a self-assessment of tax furnished to the Commissioner in accordance with the provisions of section 52B, together with the documents required to be furnished therewith.
Conclusion
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