[kictanet] MPs question Uber's 'small' Sh30 million tax payment in three years

Thu Mar 23 09:17:44 EAT 2017

Ali,

What should come first?
Increasing tax collection avenues or ensuring the already collected tax is
not misappropriated as is the norm?

Am also interested in knowing how much taxed these multinational tech
companies pay in Kenya and how KRA
collects it considering the use of technology to increase collection is not
their strong suit or are unwilling to fully
utilize it for obvious reasons.

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Regards,
Job Muriuki,

Skype: heviejob

On Thu, Mar 23, 2017 at 8:46 AM, Ali Hussein via kictanet <
kictanet at lists.kictanet.or.ke> wrote:

> Patrick
>
> You raise an interesting issue. However that should not divert us from the
> main point that Victor is making.
>
> Are multi-nationals paying their fair share of taxes?
>
> Here' an interesting story that is related to this.
>
> Apple's tax headaches
> <https://www.forbes.com/sites/kellyphillipserb/2016/08/30/apple-found-to-have-received-illegal-tax-benefits-ordered-to-pay-14-5-billion-in-back-taxes/#579b55995754>
>
> This problem emanates from the Principle of  Transfer Pricing.
> <https://en.wikipedia.org/wiki/Transfer_pricing> In a nutshell Transfer
> Price is the *price* at which divisions of a company transact with each
> other, such as the trade of supplies or labor between departments. *Transfer
> prices *are used when individual entities of a larger multi-entity firm
> are treated and measured as separately run entities. This is where it gets
> interesting:-
>
> So let's say Multi-National X has an operation in Kenya but all invoicing
> is done in say Ireland (sound familiar for those who deal with
> Multi-Nationals in the Tech Space?) but then the said Multi-National also
> invoices itself (ok, its 'subsidiary') for 'Management Fees' and other
> 'expenses'. The ultimate effect is that profits declared are at a minimum.
> And this practice is perfectly legal. :-)
>
> In Apple's case they even went ahead and negotiated a minimum tax of 3%!!!
>
> We are all equal..Except others are more equal..
>
>
> *Ali Hussein*
>
> *Principal*
>
> *Hussein & Associates*
>
>
>
> Tel: +254 713 601113
>
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>
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> On Thu, Mar 23, 2017 at 8:05 AM, Patrick Mathenge via kictanet <
> kictanet at lists.kictanet.or.ke> wrote:
>
>> That's quite interesting. However, and with all due respect,if anyone was
>> genuine and honest,  they would address and ensure that the taxes already
>> paid are put into proper use in the first instance. Otherwise it's not in
>> the interest of anyone to pay taxes that more often than not end up in a
>> few people's pockets. Again I wouldn't speak am not speaking for Uber but
>> that's just my very humble opinion, a tax paying Kenyan.
>>
>> Regards,
>> Patrick
>>
>> On 23 Mar 2017 7:05 AM, "Victor Kapiyo via kictanet" <
>> kictanet at lists.kictanet.or.ke> wrote:
>>
>>> Dear Listers,
>>>
>>> Parliament has questioned the small amount of tax paid by app-hailing
>>> taxi firm Uber, suggesting that the bulk of the profits is repatriated
>>> outside the country. The Kenya Revenue Authority (KRA) told MPs Tuesday
>>> that Uber had paid Sh30 million in taxes since 2014.
>>>
>>> http://www.businessdailyafrica.com/corporate/MPs-question-Ub
>>> er-s-Sh30-million-tax-payment/539550-3858808-jc0mvaz/index.html
>>>
>>> Just how much do companies such as Uber, Google, Facebook, Twitter etc.
>>> make from Kenya, and how much do they remit in taxes locally?
>>>
>>>
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