Tax Advisory Story

A client who was developing an industrial park in Nairobi approached us to provide tax advisory on VAT exemption. Upon review of the business and the requirements then provided in the VAT Act 2013, we realized that their business would not qualify for VAT exemption. We discussed with the client and decided to recommend amendment of the law so that they, and similar businesses in Kenya, would quality for VAT exemption. We believed that VAT exemption for this type of businesses would make them more feasible and there attract investors.

The Solution

We teamed up with the client and prepared a proposal to the National Assembly and National Treasury with details of the then status of the law, the problems encountered and reasons why we thought amendment of the VAT Act 2013, as it was then, was necessary. We then rallied for support through relevant business associations and the Kenya Investment Authority to channel the proposal to the National Treasury. We made presentations to the relevant committee of the National Assembly to justify support for the change in law to demonstrate the benefits that would be derived by the country due to enhanced incentive to investors, especially those of industrial parks.

Result

The Cabinet Secretary proposed amendment of the VAT Act 2013 in his budget statement in parliament in June 2015 and the published Finance Bill thereafter. Parliament adopted his proposal and paragraph 55 of Part I and paragraph 22 of Part II, both of the First Schedule of the VAT Act 2013 were amended through the Finance Act on 15th September 2015.

 

Internal Audit Story

A non-governmental organization (NGO) based in Nairobi that focuses on empowerment of women in the rural areas in Kenya had received donation from the World Bank for purposes of implementation of a project. One of the requirements was to engage an internal auditor during the life of the project to conduct internal audits and make recommendations to improve management controls and therefore the project’s overall management. The NGO engaged us for this purpose.

The Solution

We conducted internal audits on quarterly audits. The audits involved an understanding of the project as initially conceived and agreed between the NGO and the financier. This enabled us to plan for and conduct of the audits which we did by reviewing project documents, reports and accounts and interviewing the implementing parties and the beneficiaries in the rural areas. We then come up with audit findings with recommendations of specific actions to be taken to improve management of the project. Our audits were used by both the NGO and the financier as tools to monitor and improve the project.

Result

The Project was fully implemented with full integrity and the lessons learnt were applied by the NGO in implementation of subsequent similar projects.

 

Accounting Services Story

A company seeking to be licensed and regulated by Kenya’s Capital Market Authority was setting up in Kenya and wanted an accounting firm to outsource accounting and book-keeping work. The requirement was a fully licensed CPA firm and in good standing with the Institute of Certified Public Accountants of Kenya (ICPAK), the local regulator of the accounting profession. The service would entail setting up the book-keeping system from scratch, posting business transactions, filing relevant statutory returns, including taxes, preparation of the payroll and monthly management accounts. The company engaged us for this purpose.

The Solution

We discussed with the client to understand the specific requirements and advised on the best approach to implement the solution. The company had to incur expenses to ensure that the regulatory requirements were fully met before licensing. It was only after this that the company would be able to scout for business. Our work involved preparation of books of accounts and management reports and advising the client on details of specific regulatory requirements. The licensing journey took almost a year before licensing requirements were fully met and the license granted.

The Result

We have been the accountants of the company for a number of years now and we continue to provide the book-keeping and accounting services. We have now become more of partners with the client in accounting matters and regularly consult as the business grows and becomes more complex.