Only 11% of Companies paid corporate tax
8 August 2022
Good Morning, the general election is tomorrow.
Most offices, restaurants, shops, markets, schools, and industries will be closed tomorrow.
Naivas and Quickmart Supermarkets will close all branches and suspend online order deliveries tomorrow in order to give workers time to vote. Normal operations are set to resume on Wednesday, August 10th.
Learning institutions are also closed and are on an early mid-term break. They are expected to resume learning on Thursday 11th August 2022.
TAX
Only 11% of Companies paid corporate tax
Data from the Kenya Revenue Authority revealed that only 84,000 out of the 759,000 registered companies paid corporate taxes in the last financial year.
66.39% of registered companies filed returns by June, but only 16.75% of those companies paid corporate taxes.
What this could mean
That many companies may be reporting losses as a tax avoidance strategy, a gap that the State sought to remedy by introducing a minimum tax on corporate sales. or;
There are many dormant companies, mainly start-ups registered in recent years with the target of supplying the national government, county governments, and State corporations with goods and services.
BANKING
KCB Bank to enter the Congo market by Acquiring TMB bank
KCB Group signed an agreement to acquire an 85% stake in the Democratic Republic of Congo (DRC)-based lender Trust Merchant Bank (TMB). The two banks in a joint statement stated that the transaction is expected to close by the end of the third quarter of 2022, subject to regulatory approvals.
KCB Group also stated that it intended to acquire the remaining 15% stake in TMB in less than two years.
More details on the acquisition
The transaction will be done in cash, based on the net asset value of the DRC-based lender using a price to book multiple of 1.49.
TMB is one of DRC’s largest banks with US$1.5 billion in total assets and more than 110 branches across DRC.
CAPITAL MARKETS
Deloitte and Touché were fined Ksh 10 million by the Capital Markets Authority (CMA)
Background: The Audit firm was Chase Bank’s auditors in 2015 when billions were siphoned from the Bank by its top managers.
A recent probe by the Capital Markets Authority on Chase Banks’ ksh10 billion medium-term bond issuance in 2015, revealed falsehoods in the preparation of the lender’s financial statements and failure to disclose material information.
How Deloitte was involved
As per the report,
Deloitte did not inspect the failed lender’s IT system in annual audits, creating a loophole used by the bank’s management to hide details of billions of shillings siphoned from the bank.
A Sh14 billion hole created by the loophole was only discovered in 2015 after the Central Bank of Kenya (CBK) ordered an IT audit.
Moving forward: The Capital Markets Authority fined Deloitte Ksh 10 million and further asked the Institute of Certified Public Accountants of Kenya (ICPAK) to investigate the partners involved in audits of the bank.
LAND
Property Developers are required to issue title deeds for apartments and sectional properties by December.
Developers of apartments and sectional properties will have up to December to comply with new laws that require buyers of such assets to acquire individual ownership documents (Title deeds)
The Sectional Properties Act, whose regulations were passed by Parliament in December, requires buyers who purchase single units in apartment blocks, to get individual title deeds
Previously, the ownership document of single-unit apartments was a long-term lease of above 21 years.
Lands Cabinet Secretary Farida Karoney stated that property developers and professionals, including surveyors and lawyers, have until December to comply.
E-MOBILITY
Kenyan insurtech Lami raised a $3.7M seed extension
Background: Lami Technologies was founded in 2018 to address the problem of low insurance uptake in Africa through the use of technology. The company offers insurance products through its API platform.
Insurance technology startup Lami Technologies secured a US$ 3.7 Million seed extension to expand across Africa. Lami founder and CEO, Jihan Abass, stated that the additional funding will be used for business development, product and technology development, and expansion to other countries including Egypt, Nigeria, and Uganda.
Additionally, Lami said that it had appointed its current CFO, Roy Perlot, as a co-founder.
Perlot has been with the company since 2020.
WHAT YOU MIGHT HAVE MISSED
NCBA Group launched a Ksh 2 billion electric vehicle financing deal
NCBA Group launched a Ksh 2 billion electric vehicle financing deal for its customers as part of its green finance strategy. The financing deal will be a 5-year deal that will allow NCBA customers to enjoy asset financing of up to 80% of the total cost of any personal or public service vehicle
Special offer: NCBA will give a 10 percent interest rate on reducing the balance offer for electric vehicle loan applications received within the first 90 days
There has been a rise in insurance claims
Data from the Insurance Regulatory Authority revealed that Insurance claims incurred rose 10% to KSh18.43 billion in the first quarter of 2022
The highest insurance claims were for medical services at 42% followed by motor private insurance claims at 25.5%, and motor commercial at 24%.
Central Bank of Kenya Retains Base Lending Rate at 7.5%
The Central Bank of Kenya(CBK) has retained the base lending rate at 7.5 percent even as global inflation remains elevated.
CBK raised the rate from 7% in May as an accommodative stance to the emerging inflationary pressures in the global economy.
The company, Little, announced plans to sell up to 25% of its stake
Little plans to sell up to 25% of its stake in three years, seeking to raise capital and scale up expansion. The sale is likely to raise over Ksh 2 billion from investors.
According to Little CEO Kamal Budhabhatti, the funds will help raise the company’s market share in the retail segment, and retain top tech talent, while growing across the region.
Sacco Savings on Halt
Data from the regulator, the Sacco Societies Regulatory Authority (Sasra), revealed that more than 1.18 million Kenyans stopped making monthly contributions to savings and credit cooperative societies (SACCOs) last year.
This means that 19.7% of the 5.99 million SACCO members did not transact on their accounts for more than six months last year.