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Kusadikika
#1 Posted : Thursday, February 20, 2014 4:46:37 AM
Rank: Elder

Joined: 7/22/2008
Posts: 2,723
A woman has a garden on which she grows mboga and rears cows. From the milk and mboga proceeds she nets about Ksh. 10,000 per month. She also has some rental houses that bring in another Ksh. 15,000. She has 5 grown children who each give her Ksh. 5,000 every month. All for a total of Ksh. 50,000 per month.

Question:

According to KRA (For taxation purposes) what is her income? Are all monies received considered income?

Naomba kufunzwa.
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Bigchick
#2 Posted : Thursday, February 20, 2014 7:32:49 AM
Rank: Elder

Joined: 2/8/2013
Posts: 4,068
Location: At Large.
All looked at seperately fall below the tax bracket so hakuna malipo.

Love is beautiful and so are those who share it.With Love, Marriage is an amazing event in ones life time, the foundation of joy, happiness and success.
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mkenyan
#3 Posted : Thursday, February 20, 2014 8:05:03 AM
Rank: Veteran

Joined: 4/1/2009
Posts: 1,885
Bigchick wrote:
All looked at seperately fall below the tax bracket so hakuna malipo.


am no tax expert but that doesn't sound right.
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gregory
#4 Posted : Thursday, February 20, 2014 8:11:16 AM
Rank: Member

Joined: 12/2/2011
Posts: 176
Kusadikika wrote:
A woman has a garden on which she grows mboga and rears cows. From the milk and mboga proceeds she nets about Ksh. 10,000 per month. She also has some rental houses that bring in another Ksh. 15,000. She has 5 grown children who each give her Ksh. 5,000 every month. All for a total of Ksh. 50,000 per month.

Question:

According to KRA (For taxation purposes) what is her income? Are all monies received considered income?

Naomba kufunzwa.


am not sure whether the rental income is within the tax bracket but am sure she should not be taxed from the money she receives from her children. she has not "earned" it
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Angelica _ann
#5 Posted : Thursday, February 20, 2014 8:12:01 AM
Rank: Elder

Joined: 12/7/2012
Posts: 11,937
mkenyan wrote:
Bigchick wrote:
All looked at seperately fall below the tax bracket so hakuna malipo.


am no tax expert but that doesn't sound right.

KRA got some work to do: 1st 2 are taxable i.e. 25k though amout can be reduced!
In the business world, everyone is paid in two coins - cash and experience. Take the experience first; the cash will come later - H Geneen
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Swenani
#6 Posted : Thursday, February 20, 2014 8:24:59 AM
Rank: User

Joined: 8/15/2013
Posts: 13,237
Location: Vacuum
Kusadikika wrote:
A woman has a garden on which she grows mboga and rears cows. From the milk and mboga proceeds she nets about Ksh. 10,000 per month. She also has some rental houses that bring in another Ksh. 15,000. She has 5 grown children who each give her Ksh. 5,000 every month. All for a total of Ksh. 50,000 per month.

Question:

According to KRA (For taxation purposes) what is her income? Are all monies received considered income?

Naomba kufunzwa.


Taxable income
Agricultural income 10K(assuming she has deducted all the expenses including capital and farm house allowances)
Rental Income-15K(again assuming she has deducted interest and other running expenses)
Total Taxable income is Kshs.25K

You cannot tax the money given by her children since it has already been taxed
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ZZE123
#7 Posted : Thursday, February 20, 2014 8:26:48 AM
Rank: Elder

Joined: 6/21/2008
Posts: 2,490
Angelica _ann wrote:
mkenyan wrote:
Bigchick wrote:
All looked at seperately fall below the tax bracket so hakuna malipo.


am no tax expert but that doesn't sound right.

KRA got some work to do: 1st 2 are taxable i.e. 25k though amout can be reduced!

Farming income is taxable. Rental income is looked at separately hence taxable at 30% but one can reduce using expenses associated with the house. Money from the kids not taxable.
The man who marries a beautiful woman, and the farmer who grows corn by the roadside have the same problem
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mukiha
#8 Posted : Thursday, February 20, 2014 8:39:19 AM
Rank: Elder

Joined: 6/27/2008
Posts: 4,114
Bigchick wrote:
All looked at seperately fall below the tax bracket so hakuna malipo.



That's not the correct way to look at it!

Look at this Tax Returns Form: http://www.kra.go.ke/notices/pdf2013/IT12012.pdf

Go to pg3 and look at line 35 in PART H. It requires that ALL the income categories are added together and then the tax due calculated on the TOTAL income.

In my view, the taxable income is that which comes from her work. Gifts from her children, however high cannot qualify for taxation.

Thus the tax should be calculated only on the 25k from the farming and rental houses....assuming that the figures given here are the net profits, not the turn-over (sales)
Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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Tebes
#9 Posted : Thursday, February 20, 2014 9:12:24 AM
Rank: Elder

Joined: 11/26/2008
Posts: 2,097
Taxable income is the sum of rental and farming income, less personal relief.
"Never regret, if its good, its wonderful. If its bad, its experience."
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Angelica _ann
#10 Posted : Thursday, February 20, 2014 9:24:51 AM
Rank: Elder

Joined: 12/7/2012
Posts: 11,937
@Bigchick is part of #teamtaxevasion# d'oh!
In the business world, everyone is paid in two coins - cash and experience. Take the experience first; the cash will come later - H Geneen
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