Sigh of relief for stockbrokers

In January, the Kenya Association of Stock Brokers and Investment Banks (KASIB) filed a petition against the Attorney General and the Kenya Revenue Authority (KRA) challenging KRA’s implementation of tax on capital gains. A ruling on this petition is expected on March 18.

One of the grounds of the petition is that there are no statutory provisions in the tax legislation to allow stockbrokers collect and remit the tax. The Cabinet Secretary for Treasury announced that KRA and stockbrokers had agreed that the task of accounting for tax on capital gains should be left to investors and not intermediaries. Given the envisaged administrative burden that the stockbrokers would have borne with regard to computation of the capital gain on a transaction by transaction basis and remittance of the same to KRA, the announcement was welcome news for the stockbrokers.