Sauti Sol need some tax advice for sure 😬

Let me throw my two cents on this: Assuming Sautisol have incorporated in Mauritius or Switzerland and they have a Kenyan subsidiary, when doing international business, they invoice you through their Mauritius or Switzerland holding company. For local business, they can invoice you through their Kenyan subsidiary in KES, which will attract VAT according to the service. For their international business, no added taxes on their services since you won’t be able to claim the tax. So if the deal value is $10K, that’s what you get invoiced and pay to their Mauritius or Switzerland accounts. So how do they get the money here in Kenya? They don’t need to unless they really have to if the Kenyan subsidiary is able to support its operations. As a matter of fact, the Kenyan subsidiary should be making money for the holding company in Mauritius/Switzerland and paying dividends back to its holding company. Anyway, if they have to, depending on how they have structured the ownership of the holding company and subsidiary, “Sautisol Mauritius” or “Sautisol Switzerland” can lend “Sautisol Kenya” and that money is credited as a debt in their Statement of Financial Position and Cash Flow Statement. This will reduce tax liabilities of their Kenyan subsidiary. This can be paid back with an interest if “Sautisol Kenya” is cash flow positive. Also, the holding company can increase its equity in the subsidiary and purchase additional shares (depending on the existing ownership). As well, I presume Sautisol have copyrights, and depending on which entity they are registered to, they can pay a fee to either entity for the copyrights. And, depending on which entity pays them directly as employees (salary) or consultants (consultancy fees) or shareholders (dividends), they are subject to various taxation. Though, I wouldn’t expect Sautisol to not have solid tax advise. The biggest advantage they have with having a foreign holding company is cushioning themselves from taxation changes in Kenya. Their investment is safe enough in Mauritius/Switzerland and they are able to spread their risk well. “For conversational purposes only and not to be taken as financial or tax advice”.

@nai_gossip KRA right now. Let's the assessments begin.

@nai_gossip So these guys pay withholding taxes on YouTube revenue from US based audience to US government but 1.5% to the country they live in is where they draw the line?

@nai_gossip This right here is what we call, self snitching 😂

@nai_gossip There is wisdom in silence. Stealth wealth.

@nai_gossip Where is the pride walking and driving on roads financed by fellow citizens.While hiding wealth in tax Havens..Tax planning is important but this utterances will kill the brand..In times of ESG... guys won't touch them for advertising...

@nai_gossip Global tax principle; It’s not where your accounts are held but where your income is derived and your where you reside !!!

@nai_gossip Taxation 101: Tax is applied at the source (income jurisdiction) and not where the funds are stored (held).

@nai_gossip It's a civic duty of every citizen to pay tax. KRA should spend more on educating people about taxation and benefits that comes with it.