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Kengen FY 2017
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VituVingiSana
#31 Posted : Thursday, November 02, 2017 12:31:34 AM
Rank: Chief

Joined: 1/3/2007
Posts: 18,347
Location: Nairobi
Ericsson wrote:
http://www.businessdailyafrica.com/markets/news/KenGen-seeks-reprieve-as-taxman-demands-billions/3815534-4165526-qjsxfbz/index.html

Electricity producer Kenya Electricity Generating Company (KenGen) is optimistic of a reprieve from the taxman who is demanding Sh2.43 billion tax as well as penalties and interest.
The Nairobi Securities Exchange-listed firm attracted the compensation tax after paying dividend arrears to the Treasury last year.
KenGen paid dividend of Sh6.164 billion, according to an audit report by the Auditor General on the company for the year ended June 2017. It has been negotiating for a waiver of penalty and interest by the Kenya Revenue Authority in talks that started a year ago.

KenGen should not have announced or paid a dividend (from untaxed profits) or asked Treasury for guidance/intervention before doing so. Or if the tax has to be paid then pay it as much as it hurts.

I have a vague idea about compensating tax in Kenya but can someone explain it in KenGen's context.

Why did KenGen declare/pay a dividend from UNTAXED profits if it knew the huge compensating tax would hit them?

In this scenario, what are untaxed profits?
Aren't Capital Allowance (against taxable profits) allowed?
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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  | | Edit by user: Thursday, November 02, 2017 12:35 AM | Reason: Not specified
Muthawamunene
#32 Posted : Thursday, November 02, 2017 8:21:45 AM
Rank: Member

Joined: 1/3/2011
Posts: 264
Location: Nairobi
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  | | Edit by user: Thursday, November 02, 2017 8:33 AM | Reason: Added a new link
mamilli
#33 Posted : Thursday, November 02, 2017 10:27:57 AM
Rank: Member

Joined: 10/6/2015
Posts: 249
Location: Nairobi
Muthawamunene wrote:
The accounts & finance manager(s), really effed up.

http://www.businessdaily...55644-byxw17/index.html

http://www.businessdaily...642-13a1flyz/index.html

http://emmanuellaalia.bl...4/compensating-tax.html

A painful lesson. Education muhimu.


@Muthawamunene,you must be a lecturer somewheresmile your referencing is on another level.
Never lose your position in a bull market,BTFD.
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wukan
#34 Posted : Thursday, November 02, 2017 11:17:32 AM
Rank: Veteran

Joined: 11/13/2015
Posts: 1,654
Muthawamunene wrote:
The accounts & finance manager(s), really effed up.

http://www.businessdaily...55644-byxw17/index.html

http://www.businessdaily...642-13a1flyz/index.html

http://emmanuellaalia.bl...4/compensating-tax.html

A painful lesson. Education muhimu.


In summary Kengen should not distribute the tax incentives it receives. Expect a dividends drought every time they do a new power plant...as they say on nairobi streets wacha niende hivi nacome
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Muthawamunene
#35 Posted : Thursday, November 02, 2017 11:20:39 AM
Rank: Member

Joined: 1/3/2011
Posts: 264
Location: Nairobi
mamilli wrote:
Muthawamunene wrote:
The accounts & finance manager(s), really effed up.

http://www.businessdaily...55644-byxw17/index.html

http://www.businessdaily...642-13a1flyz/index.html

http://emmanuellaalia.bl...4/compensating-tax.html

A painful lesson. Education muhimu.


@Muthawamunene,you must be a lecturer somewheresmile your referencing is on another level.



He he. Maybe in another life, I am pretty good with search engines.
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Ericsson
#36 Posted : Thursday, November 02, 2017 12:22:42 PM
Rank: Elder

Joined: 12/4/2009
Posts: 10,804
Location: NAIROBI
wukan wrote:
Muthawamunene wrote:
The accounts & finance manager(s), really effed up.

http://www.businessdaily...55644-byxw17/index.html

http://www.businessdaily...642-13a1flyz/index.html

http://emmanuellaalia.bl...4/compensating-tax.html

A painful lesson. Education muhimu.


In summary Kengen should not distribute the tax incentives it receives. Expect a dividends drought every time they do a new power plant...as they say on nairobi streets wacha niende hivi nacome


Not necessarily when hydrology is good they may dish out some dividends.
For the past two financial years geothermal has been their saviour
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Ericsson
#37 Posted : Thursday, November 02, 2017 12:30:10 PM
Rank: Elder

Joined: 12/4/2009
Posts: 10,804
Location: NAIROBI
wukan wrote:
Muthawamunene wrote:
The accounts & finance manager(s), really effed up.

http://www.businessdaily...55644-byxw17/index.html

http://www.businessdaily...642-13a1flyz/index.html

http://emmanuellaalia.bl...4/compensating-tax.html

A painful lesson. Education muhimu.


In summary Kengen should not distribute the tax incentives it receives. Expect a dividends drought every time they do a new power plant...as they say on nairobi streets wacha niende hivi nacome


Capital gains bado iko which is also okay
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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kawi254
#38 Posted : Thursday, November 02, 2017 3:55:19 PM
Rank: Member

Joined: 2/20/2015
Posts: 468
Location: Nairobi
Compensation tax of Ksh 2.431 was paid in 2016 and not in 2017. Business daily has it twisted

Below Excerpt from 2016 Financia results:

"Compensating tax of Kshs.2,431 million is a provision that arose from payment of dividends of Kshs.5,735 million
paid to the government during the year
in
accordance with section 7A(5) of the Income Tax Act Cap 470"

http://www.businessdaily...5526-qjsxfbz/index.html

"KenGen paid dividend of Sh6.164 billion, according to an audit report by the Auditor General on the company for the year ended June 2017. It has been negotiating for a waiver of penalty and interest by the Kenya Revenue Authority in talks that started a year ago."


Point to Ponder: if KRA forgives KenGen's tax will it also forgive Nakumatt?
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Ericsson
#39 Posted : Tuesday, November 07, 2017 8:09:02 AM
Rank: Elder

Joined: 12/4/2009
Posts: 10,804
Location: NAIROBI
With the current heavy rains in the country hydro power production will be good in the second half
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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wukan
#40 Posted : Tuesday, November 07, 2017 11:35:57 AM
Rank: Veteran

Joined: 11/13/2015
Posts: 1,654
Ericsson wrote:
With the current heavy rains in the country hydro power production will be good in the second half


The Kenya power annual report has interesting stats on the regional maximum power demand Nairobi dropped from 842Mw to 831Mw demand is increasing in Coast and western

Overall power demand increase has dropped from a high 9.5% in 2012/2013 to 4.4%
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