BSP Limited

10/05/2026

Happy Mother’s Day to all mothers; the women raising families, building businesses, pursuing careers, managing homes, supporting communities and making sacrifices every single day to create a better future for those around them.

To the working mothers, the entrepreneurs, the farmers, the caregivers and the stay-at-home mums, your resilience, love, wisdom and dedication continue to shape society in ways words can barely capture.

Today, we celebrate you, appreciate you and honour the vital role you play in our lives and communities. Happy Mother’s Day.

28/04/2026

This evening I want to speak directly to contractors, consultants, and companies run by single directors without proper structures.

In the current tax environment, you must ADJUST or PERISH .

Let’s be honest.
-Many of you don’t formally record expenses.�-You procure casually without proper invoices or compliance checks.�-You don’t have solid bookkeeping.�-You mix personal and business money.�-You withdraw everything that hits the account.�-You don’t plan for tax.

And worst of it all -YOU DON’T KNOW YOUR TAX OBLIGATION

Yet a significant percentage of that consultancy income is TAX .

Now here’s what has changed.

With eTIMS framework and the operationalization of Income and expense validation , every invoice you issue is visible and every expense demand validation by being eTIMS supported! ��-If your client claims your invoice as an expense, it must match your declaration.�-If you claim an expense, it must be supported by a compliant supplier invoice.

There is no “we’ll adjust later.”
The system validates both sides.

This is the era of structure.

-If you operate casually, the system will calculate your tax for you.�
-If you operate strategically, you control your outcome.

5 PRACTICAL THINGS YOU CAN START WITH

1. Separate yourself from the business! Let business money be business money
2. Understand your Business model ( Profit equation ) and Structure
3. Know your Tax Obligations and plan for them
4. Account for every shilling as far as its business money !
5. Ensure that every business transaction is supported by an eTIMS invoice or TIMS invoice

-End -

16/04/2026

The Value Added Tax (Amendment) Bill, 2026
-It introduces a temporary reduction in VAT on specific petroleum products in Kenya.
-The Act takes effect 15th April 2026.
-It amends Section 5 of the VAT Act to apply a reduced VAT rate of 8% on:
Premium motor spirit (petrol)
Illuminating kerosene
Gas oil (diesel)

-This reduced rate is temporary, lasting 90 days from the commencement date.
-The Cabinet Secretary has the authority to extend this period by an additional 90 days through a Gazette notice.

14/04/2026

TAX RESIDENCY AND KENYA TAX REGIME

Kenya Tax regime operate on two major principles; Source and residency.

-Tax residency is an important factor in determining the scope of taxable income in Kenya.
-It determines whether an individual or company will be taxed on worldwide income or only on Kenya-sourced income.

Tax residence in Kenya is determined by Section 2(1) of the Income Tax Act (ITA).

According to this section, an individual is considered a resident for tax purposes if they meet any of the following conditions:

-If an individual is physically present in Kenya for a total of 183 days or more in a calendar year, they are classified as a tax resident, regardless of whether these days are consecutive or not.

-If an individual has been present in Kenya for an average of 122 days per year over the preceding two years, they qualify as a tax resident even if they were not physically present for 183 days in the current year.

-If an individual has a permanent home in Kenya and returns to Kenya at any time during the year, they are considered a tax resident, even if they spend most of their time abroad.

The Finance Act, 2022 defined the phrase 'permanent home' to mean a place where an individual resides or that is available to that individual for residential purposes in Kenya, or where, in the opinion of the Commissioner, the individual’s personal or economic interests are closest.

Implications of Tax Residency in Kenya
• Worldwide Taxation for Residents: A Kenyan tax resident is taxed on their worldwide income, meaning they must declare all income earned both within and outside Kenya.
• Foreign Employment Income: If a Kenyan resident works abroad but maintains tax residency in Kenya, they must still declare their foreign income. However, relief from double taxation may apply if the individual has paid taxes in another country, especially if a Double Taxation Agreement (DTA) exists.

25/02/2026

Every Business Decision Has a Tax Consequence- Filing Alone Is Not Enough

Your Tax accountant /Advisor is no longer Seasonal ; they’re Strategic partner

There was a time when businesses only spoke to their tax accountant once a year; during filing season.�
Tax compliance started and ended with submitting returns.

That era is gone.

Today, every single business decision carries a tax consequence and a Tax risk to be mitigated
• Signing a new contract�• Hiring staff�• Pricing your products�• Expanding to a new market�• Investing in equipment�• Structuring partnerships

Tax is no longer a back-office, once-a-year obligation. It’s a daily strategic consideration.

In today’s constantly evolving tax environment, a tax expert is just as important as your sales person.

Your sales team drives revenue.�Your tax expert protects profit.

One brings money in and the other ensures you keep more of it ; legally and efficiently.

Foward looking businesses no longer see tax as compliance alone; they see it as strategy, risk management and profit optimization.

Speak to your Tax expert/ Consultant /Tax accountant at the beginnig of business / decision and not during filing

18/02/2026

5 Non-Negotiables If You Are Going to Survive the Current Tax Environment

1. Tax Literacy - You have to be Tax literate

Whether you are a dentist, a plumber , an influencer, a contractor, SME owner or a political blogger , you must be tax literate.

You must understand:
-Your specific tax obligations (Income Tax, VAT, PAYE, TOT, Withholding Tax, etc.)
-Available tax regime options applicable to you ( TOT / Annual income Tax )
-Current tax law requirements and changes
-Compliance timelines (filing and payment deadlines)
- Compliance demands - eTIMS , records etc

Ignorance is not a defense.

The current Tax system is increasingly automated, data-driven and integrated.

2. Clear Separation Between Business and Personal Affairs

This is where many businesses begin their tax problems.

-Business money must remain business money.
-Business expenses must be strictly business expenses.
-Maintain a separate bank account for the business.
-Avoid mixing business funds with personal, domestic and social related transactions.

When KRA reviews your statements, explanations become very difficult.

Good governance starts with separation.

3. Establish a Solid Bookkeeping and Accounting System

-It doesn’t have to be sophisticated.

For start-ups and small businesses:

-A well-structured Excel template can work (and yes, I can assist in designing one).

Key principles:
-Every shilling in and out must be recorded and accounted for
-Perform monthly bank and cash reconciliations.
-Ensure proper classification of transactions (capital vs expense, allowable vs non-allowable, VATable vs non-VATable).
-Maintain proper documentation and records.

If it is not documented, it does not exist in the world of tax

4. Understand Your Tax Risks and Manage Them Proactively

Every business model has tax risks - especially across the supply chain.

You must:
-Identify tax risks across operations.
-Perform a Tax Risk Assessment (TARA).
-Incorporate tax risk into your overall enterprise risk

09/02/2026

Key Strategies to Boost Tax Compliance and Minimize Risk

To enhance operational efficiency and reduce financial risks associated with taxation, organizations should adopt deliberate, structured actions across key areas of compliance and governance.

1. Know Your Tax Obligations — Some Taxes Are Secondary or Conditional Obligations
-Establish all applicable taxes relevant to your business e.g., Income Tax, Turnover Tax (TOT), VAT, PAYE, Corporate Tax, Withholding Tax, and Excise Duty.
-Maintain a compliance calendar to track statutory deadlines (e.g., PAYE due by the 9th, VAT by the 20th of every month in Kenya).
-Segregate roles within the tax process ; one person prepares, another reviews and files to strengthen internal controls and accountability.

2. Keep Accurate and Complete Records — It’s the Only Language the Taxman Understands
-Ensure that invoices and receipts are eTIMS compliant
-Maintain a clear documentation trail, e.g., explanations for claimed input VAT or the basis of payroll tax calculations.
-Ensure records are accessible and audit-ready to support your tax positions during reviews or audits.

3. Plan Taxes Strategically- Think beyond filing
-Forecast tax liabilities as part of your budgeting and cash flow planning - include VAT, PAYE, and corporate tax projections.
-Track and claim allowable deductions such as rent, fuel, training costs, and professional expenses.
-Review supplier compliance regularly to ensure all are eTIMS compliant - a critical step for deductibility of expenses and claiming input VAT.

4. Integrate Tax into the Enterprise Risk Management Framework
-Include tax exposure in your organization’s enterprise risk register, categorizing it under compliance, financial, or reputational risks.
-Conduct regular internal tax reviews, ideally on a quarterly basis, to detect and correct compliance gaps early.
-Undertake an independent tax health check from external advisors for an objective view of potential exposures.

#

28/01/2026

Why Tax Risks Must Be Embedded in Enterprise Risk Management (ERM)

Many organizations treat tax as a compliance afterthought something handled quietly by finance teams but the truth is ; tax risks can disrupt strategy at the highest level.

Here’s why tax risk need to be incorporated in the ERM framework:
1. Tax is a Strategic Risk
-Audits, disputes, penalties or reputational damage directly affect profitability, cash flows and investor confidence. These are board-level concerns, not just accounting issues.

2. Holistic Risk Mapping
-Tax exposures need to sit alongside operational, financial, regulatory and strategic risks.
Example: Expanding into new markets? Beyond the commercial risks, tax obligations (VAT, withholding, customs duties) can derail projected returns.

3. Proactive Risk Management
-Identification & Assessment help spot risks early, evaluate likelihood and impact.
-Mitigation help strengthen processes, documentation, and planning.
-Monitoring & Reporting: Elevate tax to the Board/Audit Committees and ensure that its not buried in finance reports.

4. Cross-Functional Relevance
-Tax cuts across supply chain, HR, IT, and legal.
-Ignoring it creates blind spots across the organization.

5.Governance & Culture
Embedding tax risk in ERM fosters accountability, transparency and resilience.

25/01/2026

07/01/2026

Happy 2026 to you all.

12/11/2025

Struggling to keep track of your business finances? Let BSP Limited take the weight off your shoulders!
We specialize in:

Management Accounts
Tax Planning & Returns
Payroll Management
Cloud Accounting Solutions

Our expert team ensures your financial records are accurate, compliant, and optimized for growth. Whether you're a startup or an established business, we provide tailored solutions that work for you.
Call us today: 254 702 403 121 / 254 705 105 245 / 254 708 112 540
Email: [email protected]
Visit: www.bsp.co.ke
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