Wazua
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Capital Gains Tax on EQUITIES
Rank: Member Joined: 6/14/2010 Posts: 521 Location: Nairobi
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I noticed a CGT deduction on my statement. Are the brokers required to be deducting on behalf of clients or what is the current position.
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Rank: Member Joined: 8/16/2012 Posts: 660
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@hisah already post the link on the EW thread but still relevant here.
Brokers accuse KRA of shifting goal posts on tax In Summary- KRA wrote to individual brokers and investment banks on April 30 asking them to pay within 14 days. Quote:“Please note that to-date we have not received any returns or capital gains tax on transfer of investment shares conducted with effect from January 1, 2015 as required in Paragraph 18 of the Eighth Schedule to the Income Tax Act,” said the letter from the commissioner for domestic taxes, Alice Owuor.
- The brokers said it was impossible to comply with the order from the Kenya Revenue Authority (KRA) since they had not been withholding the tax due from investors. Quote:According to lobby Kenya Association of Stockbrokers and Investment Banks (Kasib), the Capital Markets Authority (CMA) had in February proclaimed that the tax would not be claimed from the intermediaries but would directly be applied to individual investors. Quote:“Stockbrokers have been left in a state of confusion and disarray,” said Kasib chief executive Willie Njoroge. Quote:
“On February 19, 2015, the Capital Markets Authority assured members that the responsibility of computing and remitting CGT shall be left to the individual investors and not the stockbrokers,” said Mr Njoroge.
Quote:This has come at a cost to the market which slipped below 5,000 points last week for the first time since December as foreign investors continued disposing of large caps at the NSE. Live and learn; and don’t forget, nothing ventured, nothing gained.
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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Indeed. There has to be another way to let the people trade, raise revenue, uphold financial inclusion, promote savings & investment culture and still win a Nobel Peace Prize. That proposed levy is a good way to go. Meanwhile... Egypt's stock market soars after halt of capital gains taxhttp://www.pantagraph.co...3-bf37-5470346d6ce6.html
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Rank: Member Joined: 12/1/2007 Posts: 539 Location: Nakuru
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[quote=Cde Monomotapa]Indeed. There has to be another way to let the people trade, raise revenue, uphold financial inclusion, promote savings & investment culture and still win a Nobel Peace Prize. That proposed levy is a good way to go. Meanwhile... Egypt's stock market soars after halt of capital gains taxhttp://www.pantagraph.co...-bf37-5470346d6ce6.html[/quote] I only we had someone here who could copy this to those KRA guys  For investors as a whole, returns decrease as motion increases ~ WB
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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Cde Monomotapa wrote:Indeed. There has to be another way to let the people trade, raise revenue, uphold financial inclusion, promote savings & investment culture and still win a Nobel Peace Prize. That proposed levy is a good way to go. Meanwhile... Egypt's stock market soars after halt of capital gains taxhttp://www.pantagraph.co...-bf37-5470346d6ce6.html As you had stated a while back, KRA can implement a sort of excise duty similar to the transaction fees which comprise the brokers fee and CSDC levy. This way it becomes easier to implement and win-win for all.
KE needs capital and it's such a small frontier market. Not the other way round and gok needs to understand that point very clearly! Capital has no loyalty! Impose barriers on it and you immediately realize that the ostrich does fly like a falcon! The CGT faceoff and the current econ weakness will continue to rock NSE downwards. Lose-lose for everyone.
My expectation is come what may when the capital flight reality check in gok reverse this CGT coercive stance even if it was one of the mandatory IMF SCF conditions!
That CGT suspension will trigger sizable rally when the day comes  $15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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Also forgot to mention this happened to Taiwan as 2015 was about to start. Capital gains tax in Taiwan postponed to 2018@cde - see below how Taiwan plans to implement CGT by offering two options; as a transaction tax or overall capital gains tax. There is no need of ramming through CGT in KE. KE needs to attract capital if vision 2030 is to become a reality. Quote:Major market players would have had the choice of paying either an extra 0.1% transaction tax on deals over NT$1 billion (US$31.5 million) or a 15% overall tax on their capital gains, according to the previous amendment to the Income Tax Act approved in mid-2013 and originally scheduled to take effect in January 2015. $15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Veteran Joined: 8/10/2014 Posts: 969 Location: Kenya
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Am at Dyer and Blair, went to withdraw, they withheld 5% of my sales proceeds. The money is still sitting in my account, I can still trade with it
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Rank: Member Joined: 9/14/2011 Posts: 834 Location: nairobi
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watesh wrote:Am at Dyer and Blair, went to withdraw, they withheld 5% of my sales proceeds. The money is still sitting in my account, I can still trade with it 5% of sales proceeds or 5% of the gain upon sale?
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Rank: Elder Joined: 7/21/2010 Posts: 6,183 Location: nairobi
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watesh wrote:Am at Dyer and Blair, went to withdraw, they withheld 5% of my sales proceeds. The money is still sitting in my account, I can still trade with it it cant be 5% of sale proceeds.  but this tax has contributed great in killing the market "Don't let the fear of losing be greater than the excitement of winning."
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Rank: Veteran Joined: 8/10/2014 Posts: 969 Location: Kenya
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heri wrote:watesh wrote:Am at Dyer and Blair, went to withdraw, they withheld 5% of my sales proceeds. The money is still sitting in my account, I can still trade with it 5% of sales proceeds or 5% of the gain upon sale? I did my calculations, i barely made a profit in my sales since majority are recently bought capital gains tax shouldnt even go above 4k but 28k has been withheld out of the 600k am removing. I think they are confused. Good thing is i can still see the withheld money in my account untouched
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Rank: Elder Joined: 7/21/2010 Posts: 6,183 Location: nairobi
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watesh wrote:heri wrote:watesh wrote:Am at Dyer and Blair, went to withdraw, they withheld 5% of my sales proceeds. The money is still sitting in my account, I can still trade with it 5% of sales proceeds or 5% of the gain upon sale? I did my calculations, i barely made a profit in my sales since majority are recently bought capital gains tax shouldnt even go above 4k but 28k has been withheld out of the 600k am removing. I think they are confused. Good thing is i can still see the withheld money in my account untouched many ignorant brokers will tend to calculate not knowing the buying price given their low working morale and low qualifications "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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KRA plans capital gains tax penalties for brokersQuote:“There has been considerable turbulence in the stock market. It is still not very clear how to go about applying the CGT because there are costs involved. Investors are not sure how to go about it. That is why the market is down 40 per cent year-on-year,” said Geoffrey Odundo, the CEO of the Nairobi Securities Exchange (NSE). If this is the CEO of NSE who doesn't know the reversal level of the market he runs I wonder what next?!? Meanwhile KRA and brokers continue to showcase a good fight. Punch after punch ringside action. $15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Elder Joined: 7/21/2010 Posts: 6,183 Location: nairobi
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hisah wrote:KRA plans capital gains tax penalties for brokersQuote:“There has been considerable turbulence in the stock market. It is still not very clear how to go about applying the CGT because there are costs involved. Investors are not sure how to go about it. That is why the market is down 40 per cent year-on-year,” said Geoffrey Odundo, the CEO of the Nairobi Securities Exchange (NSE). If this is the CEO of NSE who doesn't know the reversal level of the market he runs I wonder what next?!? Meanwhile KRA and brokers continue to their good fight. Punch after punch ringside action. Kibaki left me rich in this market, this guys are reversing the gains and making me poorer day in day out.iam thinking of crossing to rwanda. "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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mlennyma wrote:hisah wrote:KRA plans capital gains tax penalties for brokersQuote:“There has been considerable turbulence in the stock market. It is still not very clear how to go about applying the CGT because there are costs involved. Investors are not sure how to go about it. That is why the market is down 40 per cent year-on-year,” said Geoffrey Odundo, the CEO of the Nairobi Securities Exchange (NSE). If this is the CEO of NSE who doesn't know the reversal level of the market he runs I wonder what next?!? Meanwhile KRA and brokers continue to their good fight. Punch after punch ringside action. Kibaki left me rich in this market, this guys are reversing the gains and making me poorer day in day out.iam thinking of crossing to rwanda. Come to think of it Rwanda does offer an equity arbitrage when it comes to CGT. Without CGT implemented in their equity market that is already a sweet discount. However, if you manage large funds that market is too tiny to offer any decent playground. Thanks for letting me see that CGT arbitrage. Automatic sizable capital flight if their market was liquid enough. The other CGT arbitrage is now in Egypt which is larger and more liquid than NSE. That's where capital flight will land from KE.
Very silly these KE policy makers. Capital has no loyalty. So how do you meet tax targets when the econ is in a slump with a deflate equity market and an underpressure currency? You end up with a trickle of tax collection. How is this helpful? $15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Elder Joined: 2/26/2012 Posts: 15,980
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When is the term ending for Njiraini, the guy has proved that he cannot think out of the box. I wonder how much he's been able to collect from the other taxes on the NSE "There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore
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Rank: Elder Joined: 7/21/2010 Posts: 6,183 Location: nairobi
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murchr wrote:When is the term ending for Njiraini, the guy has proved that he cannot think out of the box. I wonder how much he's been able to collect from the other taxes on the NSE I dont think there is any incentive left to warrant an investor to come here. "Don't let the fear of losing be greater than the excitement of winning."
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Rank: Elder Joined: 9/23/2010 Posts: 2,220 Location: Sundowner,Amboseli
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This Njiraini guy reminds me of Eurozone. At the height of GFC in 2008 they went for austerity,tightening when the US went expansionary. Compare the 2 regions now...EURUSD bulls have been run out of town since August last year  @SufficientlyP
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Rank: New-farer Joined: 5/15/2015 Posts: 26
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murchr wrote:When is the term ending for Njiraini, the guy has proved that he cannot think out of the box. I wonder how much he's been able to collect from the other taxes on the NSE I don't think it is Njiraini's fault. The law was passed, he is just the enforcer. But he should communicate clearly on how tax is to be collected and calculated under every scenario. Not just demand it. The MPs we elected passed this law. And the president we elected, signed it into law.
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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kimugaman wrote:murchr wrote:When is the term ending for Njiraini, the guy has proved that he cannot think out of the box. I wonder how much he's been able to collect from the other taxes on the NSE I don't think it is Njiraini's fault. The law was passed, he is just the enforcer. But he should communicate clearly on how tax is to be collected and calculated under every scenario. Not just demand it. The MPs we elected passed this law. And the president we elected, signed it into law. Equality is the word. Foreign companies invest in their home countries they pay CGT. They come to Kenya they don't pay CGT. You invest abroad you pay CGT. What are we, donors? Life is short. Live passionately.
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Rank: Member Joined: 8/29/2008 Posts: 571
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sparkly wrote:kimugaman wrote:murchr wrote:When is the term ending for Njiraini, the guy has proved that he cannot think out of the box. I wonder how much he's been able to collect from the other taxes on the NSE I don't think it is Njiraini's fault. The law was passed, he is just the enforcer. But he should communicate clearly on how tax is to be collected and calculated under every scenario. Not just demand it. The MPs we elected passed this law. And the president we elected, signed it into law. Equality is the word. Foreign companies invest in their home countries they pay CGT. They come to Kenya they don't pay CGT. You invest abroad you pay CGT. What are we, donors? The REST of the WORLD bases CGT on residence.A Kenyan person or company investing in NYSE does NOT pay US CGT if their residence is Nairobi.But the kenyan CGT is participatory;it is for everyone who ventures into NSE.Whether they are resident or non-resident,it doesn't matter to KRA.
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