Brijorn & Co. Ltd

Brijorn & Co. Ltd | Tax | Audit | Advisory | Accounting | Bookkeeping | Loss Adjusting

08/03/2026

HAPPY INTERNATIONAL WOMEN’S DAY!
We honor the bold women who keep raising the bar through their determination and kindness, creating space for others to soar. We celebrate their unstoppable spirit and the way they lift everyone around them.
Cheers to all women!
Brijorn & Co. Ltd

ACCOUNTANTS | AUDITORS International Financial Reporting Standard [IFRS] 18 (Effective June 2027) replacing Internationa...
22/01/2026

ACCOUNTANTS | AUDITORS

International Financial Reporting Standard [IFRS] 18 (Effective June 2027) replacing International Accounting Standard [IAS] 1 - Statement of Comprehensive Income.

➡️IFRS vs GAAPIFRS (International Financial Reporting Standards) and GAAP (Generally Accepted Accounting Principles) are...
22/01/2026

➡️IFRS vs GAAP

IFRS (International Financial Reporting Standards) and GAAP (Generally Accepted Accounting Principles) are both frameworks for preparing financial statements, but they reflect different philosophies.

IFRS used in over 140 countries, is principle based, meaning it provides broad guidelines that rely heavily on professional judgment to reflect the economic substance of transactions.

GAAP, primarily used in the United States, is rule based, offering detailed, prescriptive rules designed to reduce ambiguity and ensure consistency. These differences affect how companies recognize revenue, value inventory, measure assets and present financial results. While IFRS promotes global comparability and flexibility.
GAAP emphasizes precision and detailed compliance making the choice of standard especially important for multinational businesses and investors comparing financial performance across borders.

AUDITING IN 2026: eTIMS and Expense-Based Income Tax.In 2026, auditing in Kenya has shifted significantly due to the ful...
22/01/2026

AUDITING IN 2026: eTIMS and Expense-Based Income Tax.

In 2026, auditing in Kenya has shifted significantly due to the full implementation of eTIMS and KRA’s increased focus on Income Tax deductibility of expenses. Audits are no longer limited to financial accuracy, they now test whether expenses are eTIMS-supported, compliant, and tax-allowable.

With eTIMS providing KRA real-time transaction data, unsupported or non-compliant expenses are increasingly being disallowed for Income Tax, even if they appear reasonable in the books. This has transformed audits into an integrated compliance exercise, linking financial statements, VAT returns, and tax computations.

For businesses, 2026 demands stronger documentation, supplier eTIMS compliance, and proactive tax reviews. For auditors, the role has expanded from assurance to early identification of tax and system-based risks.

Auditing in 2026 is no longer just about numbers, it’s about digital tax readiness.

🚨 KENYA TAX ALERTS: WHAT MATTERS AS 2026 BEGINSThe first quarter of 2026 is not about filings alone. It’s about resettin...
02/01/2026

🚨 KENYA TAX ALERTS: WHAT MATTERS AS 2026 BEGINS

The first quarter of 2026 is not about filings alone. It’s about resetting risk, documentation, and tax governance.

Here are the early-year tax alerts every Kenyan business should note;👇

1️⃣ COMPLIANCE intensity is rising, not rates
Expect more:
*Desk audits and reconciliations
*VAT vs Income Tax mismatch reviews
*Contract-based audits (services, management fees, JVs)
📌 The focus is accuracy, not expansion of tax heads.

2️⃣ VAT remains the biggest exposure point
Watch out for:
*Tightened bad-debt relief timelines
*Reverse VAT on imported services (software, consultancy, recruitment)
*Input VAT denied due to weak supplier, stock, or payment evidence

3️⃣ CONTRACTS will drive assessments in 2026.
Tax authorities are looking beyond invoices:
*-Is the service clearly defined?
*-Is the pricing defensible?
*-Does the contract match the accounting and tax position?
Most tax disputes are now born at contract signing — not during filing.

4️⃣ DIGITAL & CROSS-BORDER transactions stay under scrutiny
*Significant Economic Presence (SEP) rules remain active
*Management fees, royalties, cloud services & licenses remain high-risk
*Withholding tax errors continue to trigger penalties and interest

5️⃣ PROCEDURE will win or lose cases
Strong tax arguments are being defeated by:
⏱ missed objection timelines
📂 incomplete audit trails
📑 weak board or management approvals

What smart taxpayers should do now:
✔️ Refresh tax risk registers
✔️ Review high-value contracts before audits start.
✔️ Align VAT, WHT, PAYE and Income Tax positions.
✔️ Prepare dispute-ready documentation — early.

💡 2026 IS A DOCUMENTATION YEAR.
Those who prepare early will defend easily.
Those who don’t will litigate expensively.

25/12/2025

𝐀𝐜𝐜𝐨𝐮𝐧𝐭𝐢𝐧𝐠 𝐝𝐨𝐜𝐮𝐦𝐞𝐧𝐭𝐬 are the backbone of any finance function, and given your work in institutional finance and policy, you interact with many of them every day. A clean way to think about them is to group them by purpose—recording, summarizing, verifying, and reporting.

📘 𝐂𝐨𝐫𝐞 𝐀𝐜𝐜𝐨𝐮𝐧𝐭𝐢𝐧𝐠 𝐃𝐨𝐜𝐮𝐦𝐞𝐧𝐭𝐬

1️⃣ Source Documents: Evidence of transactions
These initiate the accounting process.
- Invoices (sales & purchases)
- Receipts
- Payment vouchers
- Credit notes & debit notes
- Payroll records
- Bank statements
- Contracts & agreements

2️⃣ Books of Original Entry (Journals): Where transactions are first recorded
- General journal
- Cashbook (cash receipts & payments)
- Sales journal
- Purchases journal
- Petty cash book

3️⃣ Ledgers: Classification and posting
- General ledger
- Debtors (accounts receivable) ledger
- Creditors (accounts payable) ledger
- Asset registers

4️⃣ Adjustment & Control Documents: Ensuring accuracy
- Bank reconciliation statements
- Accruals & prepayments schedules
- Depreciation schedules
- Inventory count sheets
- Audit working paper

5️⃣ Financial Statements: Final outputs
- Statement of financial position
- Statement of profit or loss
- Cash flow statement
- Statement of changes in equity
- Notes to the financial statements

6️⃣ Management & Compliance Documents: Internal decision-making and regulatory needs
- Budget reports
- Variance analysis
- Grant reports (for nonprofits)
- Tax returns
- Compliance checklists
- Policy manuals

𝐖𝐡𝐲 𝐭𝐡𝐢𝐬 𝐦𝐚𝐭𝐭𝐞𝐫𝐬 𝐟𝐨𝐫 𝐲𝐨𝐮𝐫 𝐰𝐨𝐫𝐤:
Given your role—refining institutional finance policies, preparing documentation, and training stakeholders—these categories help you:
🔷 Build clearer templates
🔷Standardize processes
🔷Train staff using structured modules
🔷Strengthen compliance and audit readiness

STATUTORY (NSSF)We are now entering the 4th phase of NSSF(Feb 2026) as per NSSF Act 2013. The new phase will affect any...
24/12/2025

STATUTORY (NSSF)

We are now entering the 4th phase of NSSF(Feb 2026) as per NSSF Act 2013. The new phase will affect anyone earning above KES 72,000 per month. The new maximum pensionable earning will move from KES 72,000 to KES 108,000.
As such the maximum contribution per employee will now increase from KES 4,320 to KES 6,480.

🔍 “INPUT VAT” ON STOLEN GOODS: The Kenya Shell LessonKenya Shell Ltd v Commissioner of Domestic Taxes is a clear reminde...
24/12/2025

🔍 “INPUT VAT” ON STOLEN GOODS: The Kenya Shell Lesson

Kenya Shell Ltd v Commissioner of Domestic Taxes is a clear reminder that VAT recovery is conditional, not absolute.

🛢️ CASE SNAPSHOT
Kenya Shell suffered large-scale fuel losses (theft/shrinkage) and had already claimed input VAT on the affected stock.
KRA disallowed the claim and raised a VAT assessment running into billions of shillings (over KES 2 billion) inclusive of tax, penalties, and interest.

⚖️ TRIBUNAL’S KEY FINDINGS
The Tribunal upheld KRA’s position:
Input VAT is only deductible where goods are used to make taxable supplies.
Once goods are stolen, that nexus is broken.

📚 LEGAL ANCHORES
✔ Section 17(1), VAT Act, 2013 – Input VAT deductible only for taxable supplies
✔ Regulation 9(1)(b), VAT Regulations, 2017 – No deduction where goods are lost, stolen, or destroyed
✔ Theft is not a taxable supply → no output VAT, but input VAT must be reversed

Practical Takeaway for CFOs & Tax Heads
1.Stock theft is not a VAT-neutral event
2.Accounting write-offs do not protect VAT claims
3.Input VAT must be reversed in the period the loss is confirmed
4.Insurance compensation does not convert the loss into a taxable supply

🚨 Why This Matters
This case shows how stock controls + VAT compliance failures can quickly escalate into multi-billion-shilling tax exposure.
Stolen goods = no taxable supply = no input VAT entitlement.

TAX LOSS CARRY- FORWARDS CASE.KRA vs Vijay Kumar PatelIn late 2025, the Tax Appeal Tribunal ruled in favour of taxpayer,...
24/12/2025

TAX LOSS CARRY- FORWARDS CASE.

KRA vs Vijay Kumar Patel

In late 2025, the Tax Appeal Tribunal ruled in favour of taxpayer, Vijay Kumar Shamji Patel in a dispute with the Kenya Revenue Authority (KRA) over how tax losses from earlier years should be treated under the law.
📌 What happened:
• Patel operated a rental business and had accumulated substantial tax losses from the 2014 year of income.
• He carried forward those losses and used them to offset income in later years (2019-2022).
• KRA later disallowed those losses, arguing that new rules (a 5-year cap on carrying forward losses) should apply even to older losses.
• The Tribunal found that applying the new 5-year limit retrospectively was unlawful, since the losses were incurred before the rule existed.
• The decision means taxpayers can continue to use pre-existing loss carry-forwards even if the new law applies going forward.
🔎 Why this matters:
📌 It protects taxpayer rights and legal certainty — especially for businesses that relied on longstanding tax provisions.
📌 It limits how far KRA can claw back revenue using newer tax rules against older years.
📌 It shows the importance of accurate record-keeping and legal strategy for tax disputes.






📌 KRA AGENCY NOTICES: What Every Director, Finance Lead & SME Owner Must KnowAgency notices remain one of the most disru...
24/12/2025

📌 KRA AGENCY NOTICES: What Every Director, Finance Lead & SME Owner Must Know

Agency notices remain one of the most disruptive enforcement tools used by the Kenya Revenue Authority (KRA). Understanding how they work—and how to avoid or lift them—can save your business cash flow, reputation, and operations.

🔎 What is a KRA Agency Notice?

An agency notice is a legal directive issued by KRA to a third party holding your funds (usually banks, debtors, tenants, or payment platforms) requiring them to remit money directly to KRA to settle outstanding tax liabilities.

It is issued under the Tax Procedures Act (TPA).

📂 Common Types of Agency Notices

1. Bank Agency Notice
Sent to commercial banks.Results in account freezing or direct debiting

2. Debtor Agency Notice
Issued to customers owing you money. Your receivables are redirected to KRA

3. Tenant/Landlord Agency Notice
Rent payable to you is diverted to KRA

4. Payment Platform Notices
Issued to M-Pesa, card processors, digital platforms

⚠️ Why Does KRA Issue Agency Notices?

KRA typically issues agency notices when:

Tax returns are filed but taxes not paid

Taxes are assessed via audit/additional assessment

There is non-response to demand notices

A payment plan was agreed but defaulted

Taxpayer ignores system-generated arrears notifications

👉 Importantly: KRA is not required to obtain a court order before issuing an agency notice.

🚫 How to Avoid an Agency Notice

1. File ALL returns on time (even nil returns)

2. Reconcile iTax regularly to identify ghost arrears

3. Respond promptly to KRA demand letters

4. Apply for a payment plan early before enforcement

5. Object to incorrect assessments within 30 days

6. Engage KRA through a tax agent where matters escalate

Prevention is always cheaper than enforcement.

🔓 Step-by-Step: How to Lift a KRA Agency Notice

Step 1: Identify the Basis
Log into iTax
Confirm:

Tax head involved (VAT, PAYE, Income Tax, etc.)

Whether arrears are principal tax, penalties, or interest

Step 2: Choose the Appropriate Resolution
You may:
Pay in full (fastest route)
Apply for a payment plan (for genuine cash flow constraints)
Lodge an objection (if assessment is disputed)

Step 3: Engage KRA Formally
Write an official request for lifting the agency notice
Attach:
Proof of payment / payment plan approval
Objection acknowledgement (if applicable)

Step 4: Follow Up with the Collecting Office
Physical or email follow-up with the Debt Enforcement Unit
Ensure the lifting letter is issued to:
Bank
Debtor
Platform

Step 5: Confirm Release
Obtain written confirmation
Confirm bank account functionality restored
Keep records for audit trail

⏱️ Timelines vary, but proactive follow-up significantly shortens resolution time.

🧠 Key Takeaway
Agency notices are they are triggered. Most are avoidable. And almost all can be resolved faster with professional handling.

Address

44031
Nairobi
00100

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Tuesday 09:00 - 17:00
Wednesday 09:00 - 17:00
Thursday 09:00 - 17:00
Friday 09:00 - 17:00

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