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Capital Gains Tax on EQUITIES
Rank: Chief Joined: 1/13/2011 Posts: 5,964
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Well, the scoreboard has spoken and might continue to speak until some more jobs are shed and all those who applied for IB licenses recently find it futile.
Collection/Admin. is the issue. It is just messy. Disputes from the smallest investor to the largest.
More (short/medium) perspective is; commodities down, exports down, tourism down. The NSE has held up the current account with FX for two years straight. Throw this under the bus too and we'll be calling in that IMF SCF real soon.
So, without much ado I say a transaction tax. Accommodate KRA somewhere in the commission on the Buy & Sell. The brokers are used to collecting the other fees already.
To mitigate the rise in costs from the above, then NSE/CMA continue looking into structural inflation - like how they centralized payments at the CBK.
The biggest folly in all this is making estimates on turnover. This is wealth, not income. There are investors who are so underwater that CGT does not even occur to them, unless certain stocks go up by over 300%!
Kwa hayo, buy laggards and battered stocks. That's where regular trading might continue to occur - mitigation. Blue chips will be tricky on fair value.
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Rank: Veteran Joined: 4/23/2014 Posts: 909
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mkeiy wrote:shrewdinvestor wrote:someone should punch some sense into GOK's head.They should just look at the volumes/activity in December and January and realize how their CGT is wrecking havoc!Investors avoid tax like plague! The brokers are not helping either, my broker withheld 5% of the sell PROCEEDS, claiming they are not sure of how to calculate the capital gain. CRAZY! Pole but next time factor in the 5% as an average purchase cost to your sell price. “You can get in way more trouble with a good idea than a bad idea, because you forget that the good idea has limits.” - Ben Graham
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Rank: Elder Joined: 7/21/2010 Posts: 6,183 Location: nairobi
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Before investors adjust their minds one brokerage will go under, it will not be business as usual interms of the frequency ot transactions "Don't let the fear of losing be greater than the excitement of winning."
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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Interesting read. http://www.businessdaily...0/-/6mui8a/-/index.html
Indeed the big 4 has seen vapour volume foreigner inflows post CGT. Vapour volume (fumes) can never sustain a rally. A rally without the big 4 participating is subject to a swift reversal. $15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Veteran You have been a member since:: 9/18/2014 Posts: 1,127
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hisah wrote:Interesting read. http://www.businessdaily...0/-/6mui8a/-/index.html
Indeed the big 4 has seen vapour volume foreigner inflows post CGT. Vapour volume (fumes) can never sustain a rally. A rally without the big 4 participating is subject to a swift reversal. That doesnt look good. Interesting to note that equity has had the least reduction of foreign inflows in the aforementioned time period. All the 4 counters also don’t have much headroom fundamentally so it was always going to be an uphill climb. That said a reversal is always welcome a 20% slide would do for me. The main purpose of the stock market is to make fools of as many people as possible.
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Rank: Member Joined: 5/8/2013 Posts: 386 Location: Nyali mombasa
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NKT went to try cash in and was handed 50 CGT forms to fill I just gave up too cumbersome
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Rank: Veteran Joined: 11/11/2006 Posts: 971 Location: Home
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According to today's Business Daily paper, KRA expects me to file the returns.
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Rank: Veteran Joined: 6/23/2011 Posts: 1,740 Location: Nairobi
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I think this a case of losing the fight without losing face.
Call is exit strategy
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Rank: Veteran Joined: 4/16/2014 Posts: 1,420 Location: Bohemian Grove
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holycow wrote:According to today's Business Daily paper, KRA expects me to file the returns. KRA should know the volumes won't be the same once CGT comes into effect so they should throw out those revenue projections. And that notion that equities are only for the rich hence should be taxed to avoid creating inequality. nkt!
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Rank: Elder Joined: 5/25/2012 Posts: 4,105 Location: 08c
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holycow wrote:According to today's Business Daily paper, KRA expects me to file the returns. Quote:
Shifting the responsibility of accounting for the capital gains tax to investors through an amendment of the relevant law means the taxman will have to wait until the next financial year beginning July to bring the new tax measure into force.
It also means brokers are for the time being not required to levy the tax while the investors cannot take up the job because it would be unlawful to do so.
Does this mean that CGT is 'on suspension" for the time being?? Pesa Nane plans to be shilingi when he grows up.
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Rank: Elder Joined: 4/22/2010 Posts: 11,522 Location: Nairobi
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Pesa Nane wrote:holycow wrote:According to today's Business Daily paper, KRA expects me to file the returns. Quote:
Shifting the responsibility of accounting for the capital gains tax to investors through an amendment of the relevant law means the taxman will have to wait until the next financial year beginning July to bring the new tax measure into force.
It also means brokers are for the time being not required to levy the tax while the investors cannot take up the job because it would be unlawful to do so.
Does this mean that CGT is 'on suspension" for the time being?? We are just in limbo.... possunt quia posse videntur
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Rank: Elder Joined: 7/22/2009 Posts: 7,452
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Pesa Nane wrote:holycow wrote:According to today's Business Daily paper, KRA expects me to file the returns. Quote:
Shifting the responsibility of accounting for the capital gains tax to investors through an amendment of the relevant law means the taxman will have to wait until the next financial year beginning July to bring the new tax measure into force.
It also means brokers are for the time being not required to levy the tax while the investors cannot take up the job because it would be unlawful to do so.
Does this mean that CGT is 'on suspension" for the time being?? That is my understanding. The broker is not required to deduct the tax and there is no law requiring you to! No CGT for now!!!! Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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Rank: Elder Joined: 12/4/2009 Posts: 10,678 Location: NAIROBI
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CGT was designed to fail just like the rental tax Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Veteran Joined: 1/20/2011 Posts: 1,820 Location: Nakuru
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so when should i file CGT on my portfolio....when i have mad a sale or when my portfolio gains?? Why is go.ke not doing civic education to wanjiku. She has also invested at the NSE. She deserves to know how to handle this CGT issue Dumb money becomes dumb only when it listens to smart money
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Rank: Veteran Joined: 6/23/2011 Posts: 1,740 Location: Nairobi
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Failed. Nothing to educate about
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Rank: Elder Joined: 7/22/2009 Posts: 7,452
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Fyatu wrote:so when should i file CGT on my portfolio....when i have mad a sale or when my portfolio gains?? Why is go.ke not doing civic education to wanjiku. She has also invested at the NSE. She deserves to know how to handle this CGT issue This CGT business WILL FAIL!!! 1) What are foreign investors (including those from Rongai) expected to do? Come to Kenya and pick the forms? Download forms fill in print and send? Fill online? What if they don't??? You go looking for them in Pakistan or wherever they come from? Do you have the resources? Will? Stamina? etc.? 2) Who should submit the tax/money to KRA? Surely not the broker!!! It is no longer his work now! What if I don't forward the money? Do you have the resources, time, will power to chase after the money. When you get me, will you hold me by the throat so that I give you the money? Probably not? What next? Court? Seriously? I'm I the only guy you are after? Oh, we are many? You will prosecute all of us? Lawyers? Kenyan courts? Can they handle such volumes? Have you seen the backlog of cases? Current backlog would take 3 years to clear if there are no new cases! Are you sure you want to go there? Did I mention my capital gains might be just 2,000/= which means you are running after 100/=? Or it could even be 20,000/= and you are running after 1,000/=. Did I also mention I might be from Syria?? Are you still with me??? You = KRA. Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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Rank: Veteran Joined: 11/15/2013 Posts: 1,977 Location: Here
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MaichBlack wrote:Fyatu wrote:so when should i file CGT on my portfolio....when i have mad a sale or when my portfolio gains?? Why is go.ke not doing civic education to wanjiku. She has also invested at the NSE. She deserves to know how to handle this CGT issue This CGT business WILL FAIL!!! 1) What are foreign investors (including those from Rongai) expected to do? Come to Kenya and pick the forms? Download forms fill in print and send? Fill online? What if they don't??? You go looking for them in Pakistan or wherever they come from? Do you have the resources? Will? Stamina? etc.? 2) Who should submit the tax/money to KRA? Surely not the broker!!! It is no longer his work now! What if I don't forward the money? Do you have the resources, time, will power to chase after the money. When you get me, will you hold me by the throat so that I give you the money? Probably not? What next? Court? Seriously? I'm I the only guy you are after? Oh, we are many? You will prosecute all of us? Lawyers? Kenyan courts? Can they handle such volumes? Have you seen the backlog of cases? Current backlog would take 3 years to clear if there are no new cases! Are you sure you want to go there? Did I mention my capital gains might be just 2,000/= which means you are running after 100/=? Or it could even be 20,000/= and you are running after 1,000/=. Did I also mention I might be from Syria?? Are you still with me??? You = KRA.   @Maich you nailed it. Rongai is not your mothers nowadays.. ..upto 6hrs time on road. In deed KRA failed on this one. If gvt needed money..they could have added 0.1 % on commisions....good money in an easy way whether you gain or loose on capital just like on excise duty on bank transactions. Everybody STEALS, a THIEF is one who's CAUGHT stealing something of LITTLE VALUE. !!!
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Rank: Elder Joined: 3/2/2009 Posts: 26,328 Location: Masada
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maka wrote:Pesa Nane wrote:holycow wrote:According to today's Business Daily paper, KRA expects me to file the returns. Quote:
Shifting the responsibility of accounting for the capital gains tax to investors through an amendment of the relevant law means the taxman will have to wait until the next financial year beginning July to bring the new tax measure into force.
It also means brokers are for the time being not required to levy the tax while the investors cannot take up the job because it would be unlawful to do so.
Does this mean that CGT is 'on suspension" for the time being?? We are just in limbo.... What about CGT on purots? Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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whiteowl wrote:holycow wrote:According to today's Business Daily paper, KRA expects me to file the returns. KRA should know the volumes won't be the same once CGT comes into effect so they should throw out those revenue projections. And that notion that equities are only for the rich hence should be taxed to avoid creating inequality. nkt! The CGT drama continues.
KRA to miss CGT target
$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Veteran Joined: 4/16/2014 Posts: 1,420 Location: Bohemian Grove
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hisah wrote:whiteowl wrote:holycow wrote:According to today's Business Daily paper, KRA expects me to file the returns. KRA should know the volumes won't be the same once CGT comes into effect so they should throw out those revenue projections. And that notion that equities are only for the rich hence should be taxed to avoid creating inequality. nkt! The CGT drama continues.
KRA to miss CGT target
So you set a target of 7 billion but end up collecting only 200 million. Then you go ahead to set a target of 10 billion for the next financial year.What are these guys smoking? ? No wonder they came up with a 2 trillion budget.
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