Friday, September 21, 2007

Tax Collection is Unprofitable

KRA shocker
The Kenya Revenue Authority, the organization which has re-written our donor relationship, championed responsibility/awareness of tax paying among citizens, spurred parastatals to start paying dividends back to the government (instead of draining it) and enable the fixing of the economy – is not profitable!

Year end results (June 2006) show the tax collector with income of 4.8 billion and expenditure of 6.0 billion – meaning a deficit of 1.2 billion and that compares to 2005 when they just about broke even 5.1 billion of income and expenditure. They also don’t have the title deed to their headquarters – Times Tower worth 2.5 billion that is still in the name of Central bank (for whom the tower was built)

Stanbic CFC merger approved
The Finance Minister has approved the merger between Stanbic and CFC paving the creation of the country’s 4th largest bank (see bank rankings and an earlier comparison of the parties)

The combined, but yet to be named, bank will have assets of over 55 billion shillings ($800 million), deposits of 43 billion, loans of 30 billion and a pre tax profit as June 2007 of 934 million ($14 million)

Capital markets authority (CMA) approval should be a formality, as they have already been assured that the new bank will remain listed on the NSE.

MP behaving badly
A high flying MP has grabbed i.e. taken over and fenced the parking lot of a popular Nairobi Sports Pub which he frequents the place – even as he is trying to extract an exorbitant rent from the pub for use of the yard.


kenyaonly said...

lol@mp who was chapwad....on KRA its a shame that they have not yet acquired times tower, maybe even central bank is not the lien holder don't be suprised 20 years down the line to learn that the property had been acquired by someone in "cayman islands"

Eric said...

Hey Bankelele. I would like to request you to post a IT-Instructor job for a tech centre. Is there an email addreess through which I can send it to you?

coldtusker said...

Banks: I disagree that the KRA spurred parastatals to pay dividends. The KRA is not a "management or operations or financial consultant" who would have changed the operations of parastatals.

Many parastatals were privatised or GOK decreased their shares & influence e.g. KCB is no longer "controlled" by the govt thus no more political loans.
KQ is run by KLM not the kleptocrats of yore.
KenRe cleaned up the books for the IPO, etc.
RVR took over KR's assets & operations.

coldtusker said...
This comment has been removed by the author.
coldtusker said...

Times Tower's land was "sold" by fred gumo... who got it for free on orders from klepto namba 1 aka dan "the thief-in-chief" moi.

If KRA doesn't have a "clean" title then what chance does the ordinary mwananchi have?

bankelele said...

kenyaonly: Hope not, but it's ommon with big plots for these to delay with titles


coldtusker: They staretd acknowledging top taxpayers - pulic & prviate and that became a point of competition among agencies (though some grumbled that they were being over-taxed e.g. safaricom)
- On Times Tower, I think Gumo's plot is a differewnt one - where the parking is next to Tamarind

coldtusker said...

I would rather see more profits than being feted as a "high" taxpayer!

Plus KRA still kicks in the arse even while giving you awards!!!

Kenol is owed over ONE BILLION in refunds for VAT & duties for fuel exported over 6 months ago.

Many exporters have trouble getting VAT refunds coz of lethargy & poor policies of GOK & KRA.

At Kenol's 2004-5 AGM, there was a comment that Kenol should reject the award & ask for the money to be spent on refunds instead of "trophies".

I do not expect a firm to compete for "highest" taxpayer. They should compete for highest EPS, ROI, ROE, etc!!!

Take all means to be tax avoiders (not evaders) by using all tax loopholes & allowances to maximise profits for shareholders!!!

pesa tu said...

The KRA Act was changed last year to increase KRA's commission to 2% of the amount it collects up from 1.5%.Read last year's FINANCE BILL

bankelele said...

Coldtusker: It's true refunds have been slow, exp. for oil companies but I had no idea the tax issue was so emotive for Kenol shareholders.Maybe I should attend a Kenol AGM (shame am not a shareholder though)

pesa tu: that's quite a budget, and a motivation for them.

coldtusker said...

Slow refunds = higher borrowings = slower growth = reduced profits = reduced dividends!

Dropmyload said...


Someone should name and shame the said mp on wikileaks, so we all know and vote accordingly!

bankelele said...

coldtusker: Nice correlation.

Dropmyload: "High Flying" is the key


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