After discussing withholding tax (WHT) refunds in February, it
is WHT time again. This is my current obsession without a doubt and
it is not about to blacken out.
In practice this tax is withheld upon making a payment to
suppliers.
a) How about if we do not make a payment or if we delay to make
a payment?
Currently as long as no payment is made to the supplier, then no
payment of WHT is made to the URA. So we continue to have year on
year financial reports showing the balance payable to the supplier.
This balance includes what should be WHT.
In a very recent tax case determination by the Court of Appeal
of Kenya, the word 'payment' as far as
withholding tax is concerned has been defined to include amounts
that have been credited, distributed,
dealt with, recognised as
payable this then goes beyond the shallow meaning of
'delivery of money' or 'to give what is
owed'.
