04/06/2026
When is a payment truly considered "paid" for tax purposes?
As businesses prepare for June tax return filings, a landmark Court of Appeal decision continues to shape withholding tax compliance in Kenya.
In KRA v Republic of Kenya (Ex Parte: Fintel Limited), the Court held that a withholding tax obligation may arise even where no money has physically changed hands. Recording an expense as a liability and claiming it as a deduction could be enough to trigger compliance obligations.
This raises important questions for businesses:
✔️ Are accrued expenses in your accounts creating unseen withholding tax exposure?
✔️ Have interest, management fees, or professional fees been claimed as deductions without corresponding WHT compliance?
✔️ Could a routine KRA audit uncover liabilities that were never anticipated?
The ruling offers valuable guidance—but it also leaves several practical questions open for debate.
Read our latest Tax Law Series article and consider whether your current accounting and tax practices would withstand scrutiny.
What are your thoughts on the Court's interpretation of the word "paid"?
Does it strike the right balance between tax compliance and commercial reality?
https://www.linkedin.com/pulse/when-paid-doesnt-mean-what-you-think-withholding-xu0kf
A landmark Court of Appeal ruling redefined one of the most common words in tax law — and the consequences for businesses filing returns this June are still unfolding. Introduction The Season That Separates the Prepared from the Exposed June is not an ordinary month for Kenyan businesses.
