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The Capital Gains Tax
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newfarer
#31 Posted : Thursday, August 28, 2014 6:29:54 PM
Rank: Elder

Joined: 3/19/2010
Posts: 3,505
Location: Uganda
jawgey wrote:
kazee wrote:
So if i buy land for 1m, use 3m to develop it and sell the property for 8m, do i pay 5% on (8m-1m)=7m or what? Coz the difference is not all profit, 3m was used to develop the empty land.

Tax accountants?


Development of land is a capital expenditure so there's no way KRA will allow that expense.

you will only be able to claim capital allowances when declaring your income. e.g. rental income.

otherwise capital gains will apply to the (8-1)=7m which is the effective gain doesn't matter if there are legal fees, valuation fees et al involved.

this is madness
punda amecheka
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dunkang
#32 Posted : Thursday, August 28, 2014 8:50:21 PM
Rank: Elder

Joined: 6/2/2011
Posts: 4,824
Location: -1.2107, 36.8831
Bye Bye NSE.

This will definitely make everything in a Kenyan's life more expensive.
Receive with simplicity everything that happens to you.” ― Rashi

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hisah
#33 Posted : Friday, August 29, 2014 3:08:10 PM
Rank: Chief

Joined: 8/4/2010
Posts: 8,977
Capital gains tax to hit housing most

What will be the net effect to HF, HAFR as well other real estate players and that mortgage income pie for lenders?

CGT on equities is coming too. IMF ECF conditions will be implemented against all odds Sad

1. VAT across board - check (tho KQ has been given a reprieve, but what about agribusiness?)

2. NSE dumutualization - check (IPO floats 9/9/2014)

3. CGT implementation - check (Mining and real estate implemented, pending equities)

Higher tax rates generally slump an economy and the current gok has decided step on the gas with tax hikes to shore up its revenues. The biggest signal will be mobile money decline. When that happens, the econ will contract faster than expected!

The other reason I got so bearish the KES was this article - http://ow.ly/AQP1X

$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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edwing
#34 Posted : Friday, August 29, 2014 5:05:30 PM
Rank: New-farer

Joined: 1/31/2010
Posts: 23
Location: Nairobi
Why are we having this discussion. Companies trading in the NSE do pay corporate tax on their gains currently for all profits. Individuals don't. KRA should have a look at the tax accounts of people in this page some don't have a clue how tax is paid.
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VituVingiSana
#35 Posted : Friday, August 29, 2014 11:10:31 PM
Rank: Chief

Joined: 1/3/2007
Posts: 18,356
Location: Nairobi
edwing wrote:
Why are we having this discussion. Companies trading in the NSE do pay corporate tax on their gains currently for all profits. Individuals don't. KRA should have a look at the tax accounts of people in this page some don't have a clue how tax is paid.
Double Taxation. A travesty.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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hisah
#36 Posted : Tuesday, September 09, 2014 5:45:41 AM
Rank: Chief

Joined: 8/4/2010
Posts: 8,977
CGT on shares now clarified. 5% tax. Seems wazuans don't fancy The East African paper.

http://www.theeastafrica.../-/d45jlfz/-/index.html

As part of those IMF ECFs (conditions) not surprised to see all these chaos. VAT revision, mobi cash excise duty etc. Arbitrary taxation here and there as tax regime becomes aggresive... What I see coming is endless court cases by KRA as tax evasion becomes rife due to an aggressive tax regime. Capital flight will flow towards mauritius and sychelles as a legal tax evasion option.

**Capital is neither patriotic nor loyal. Hot money will flow out especially on bonds and real estate where sizable amounts are flipped**

So will wanjikus equities gain of 100/- be subject to CGT? If so, how do you convince wanjiku to stick or return to the share market?

Paying tax is not the issue, it's the implementation aggression that kills it.
$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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murchr
#37 Posted : Tuesday, September 09, 2014 5:49:42 AM
Rank: Elder

Joined: 2/26/2012
Posts: 15,980
hisah wrote:
CGT on shares now clarified. 5% tax. Seems wazuans don't fancy The East African paper.

http://www.theeastafrica.../-/d45jlfz/-/index.html

As part of those IMF ECFs (conditions) not surprised to see all these chaos. VAT revision, mobi cash excise duty etc. Arbitrary taxation here and there as tax regime becomes aggresive... What I see coming is endless court cases by KRA as tax evasion becomes rife due to an aggressive tax regime. Capital flight will flow towards mauritius and sychelles as a legal tax evasion option.

**Capital is neither patriotic nor loyal. Hot money will flow out especially on bonds and real estate where sizable amounts are flipped**

So will wanjikus equities gain of 100/- be subject to CGT? If so, how do you convince wanjiku to stick or return to the share market?

Paying tax is not the issue, it's the implementation aggression that kills it.


5% is just too high, considering this is not the only tax to be applied.

"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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sparkly
#38 Posted : Tuesday, September 09, 2014 6:43:22 AM
Rank: Elder

Joined: 9/23/2009
Posts: 8,083
Location: Enk are Nyirobi
murchr wrote:
hisah wrote:
CGT on shares now clarified. 5% tax. Seems wazuans don't fancy The East African paper.

http://www.theeastafrica.../-/d45jlfz/-/index.html

As part of those IMF ECFs (conditions) not surprised to see all these chaos. VAT revision, mobi cash excise duty etc. Arbitrary taxation here and there as tax regime becomes aggresive... What I see coming is endless court cases by KRA as tax evasion becomes rife due to an aggressive tax regime. Capital flight will flow towards mauritius and sychelles as a legal tax evasion option.

**Capital is neither patriotic nor loyal. Hot money will flow out especially on bonds and real estate where sizable amounts are flipped**

So will wanjikus equities gain of 100/- be subject to CGT? If so, how do you convince wanjiku to stick or return to the share market?

Paying tax is not the issue, it's the implementation aggression that kills it.


5% is just too high, considering this is not the only tax to be applied.



5% tax on the "gain" is very low for a non tax haven country. Expect the rate to go up next year or two.
Life is short. Live passionately.
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a4architect.com
#39 Posted : Tuesday, September 09, 2014 8:47:32 AM
Rank: Veteran

Joined: 1/4/2010
Posts: 1,668
Location: nairobi
compared to south africa's at 10%, kenya's 5% is not high. The south african capital gains tax has actually aided the south african real estate industry by slowing down on speculation,hence lower housing costs.
http://southafrica.anglo...taxes/capital-gains-tax/
As Iron Sharpens Iron, So one Man Sharpens Another.
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Mainat
#40 Posted : Tuesday, September 09, 2014 8:53:20 AM
Rank: Veteran

Joined: 11/21/2006
Posts: 1,590
I would be surprised if our CGT doesn't match our neighbours i.e. 20-30% before 2017.
We are like frogs in a sufuria. Temperature is now set at 5 degrees
Sehemu ndio nyumba
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