Question 1:

The Kenya Revenue Authority (KRA) just like other revenue authorities in the region have embarked on certain reforms to improve revenue collection in the country, including but not limited to implementation of the i-tax system, replacement of the Simba system, etc. Discuss the various initiatives (minimum 5 initiatives) that KRA has implemented since 2015 to enhance revenue collection citing the advantages of each initiative. 10 Marks

Question 2

Write short notes on professional ethics in Taxation. The notes should specifically touch on: 1. Fundamental principles of Ethics (At least 4) 2. Obligations to clients 3. Matters relating to handling new clients 4. Matters giving rise to conflict of interest 5. Moral and social issues in taxation 6. Any other areas you deem necessary to discuss under this topic 10 Marks

Question 3

Tax disputes often arise between tax payers and the tax authorities. Discuss the dispute resolution mechanism provided for under the income tax law and the tax procedures act in Kenya. Outline the steps a tax payer would follow when objecting to the commissioner's decision on a disputed case. Retrieve a high court decided case between any tax payer and the KRA and discuss in brief the case by the Appellant and the position as per the Income Tax Law held by the Respondent (the KRA) and indicate the importance of the ruling and its effect on tax collection/administration. 10 Marks

Question 4

A Kenyan holding company which receives management fees and interest income from its 3 wholly owned subsidiaries. The 3 subsidiaries are involved in trading and receive management support and loans from the holding company. The group CEO, CFO and other group senior management sit at the holding company level and recharge their time across the 3 subsidiaries including other costs such as the IT support, etc. The holding company receives dividends, charges a management fee for all the group companies and also receives interest income for loans advanced to the group companies.

Discuss the following aspects in detail highlighting all the tax considerations:

a) Tax implications of any dividends received

b) Tax implications on the interest income and expense

c) Tax implications of the management fees charges

d) Transfer pricing implications for the group