Adamjee Auditors CPA's

If you are a HR outsourcing company, you should probably stop scrolling for a minute.

In May 2025, the Tax Appeals Tribunal delivered a decision that every HR outsourcing firm in Kenya should quietly read twice.

In Clovers Management and Training Consultants Limited v Commissioner of Domestic Taxes, an HR outsourcing company found itself staring at a KES 103.3 million assessment.

Breakdown:
Corporate Tax: KES 19.3M
VAT: KES 84.0M
Total exposure: KES 103M.

What triggered it?
The company’s position was straightforward. They argued they were simply disbursing salaries on behalf of their clients, acting as an agent, not an employer.

The payroll funds flowed through their account, but the employees, they said, belonged to the client. The Tribunal saw it differently, after analysing contracts and bank flows, it held that:

The outsourced staff were legally employees of the HR firm
Payroll inflows formed part of the company’s taxable turnover
VAT applied to the full invoice value, salary plus markup
Banking analysis by KRA was valid in determining turnover

The appeal was dismissed. And just like that, a payroll model became a nine-figure tax exposure.

Why This Matters for HR & Payroll Consultants

If your firm:
Receives full payroll into its own bank account
Controls or signs employment contracts
Issues consolidated invoices (salary + service fee)

You may believe you’re facilitating payments, but KRA may see something else entirely.

They may see an employer, and that changes everything:

Corporate tax exposure
VAT liability on gross flows
PAYE obligations

The uncomfortable question. If KRA analysed your payroll bank flows today, would your structure clearly demonstrate agency? Or would it look like employment?

In this case, the structure cost KES 103 million.
For HR outsourcing firms, this isn’t theoretical risk, it’s structural risk.
Before an audit stress-tests your model, it may be worth stress-testing it yourself.

MONDAY REFLECTION 💭
Picture this, you’re having a normal Tuesday. Coffee is hot, clients are flowing, business is moving. Life is life-ing.

Then you get that notification….

Your bank account has been frozen by the Kenya Revenue Authority.

Suddenly, panic. Suppliers are calling, staff are waiting, you are sweating.

And the assessment?
“Millions.”

Now here’s where things get serious.
At that moment: Motivational speeches won’t help, your cousin who “knows someone at KRA” won’t help, documents will.

That “soft loan” — is there a signed agreement?
Those expenses — do you have valid invoices?
That deduction — is it properly supported?

Because when we step in to represent you in a tax dispute, here’s the truth:

Yes, we represent clients.
Yes, we go all the way when necessary.
And yes, we win cases.

But to help you win, you must help us help you. Strong record-keeping is not a formality, it is your first line of defense.

So this Monday, pause and reflect:
If KRA pressed pause on your account today…..Would your paperwork fight back?

Let’s not wait for enforcement to start organising.

KRA is watching 👀 and it’s not just your tax return anymore.
With eTIMS fully in play, KRA is matching what you declare against:

✔️ eTIMS invoices
✔️ Withholding tax filings
✔️ Customs records

No invoice? That expense may not count.
Wrong details? You could still be exposed.

Bottom line: documentation and systems now matter more than ever.

Need help, we got you covered. Talk to us...

📩 [email protected]
📞 +254 703 899 606

We’re Hiring! Receptionist / Front Office Administrator!

Adamjee Auditors, a leading audit, tax, and advisory firm, is looking for a friendly, organized, and professional Receptionist / Front Office Administrator to join our Nairobi office.

If you enjoy being the first point of contact for clients, thrive in a professional environment, and have a passion for keeping things running smoothly, this could be your next career opportunity.

Key Responsibilities:
🔹 Welcome clients and visitors with a professional and warm demeanor
🔹 Answer, screen, and direct incoming phone calls efficiently
🔹 Maintain a tidy and welcoming reception area
🔹 Manage appointment schedules, client visit logs, and meeting room arrangements
🔹 Assist with filing, scanning, and preparation of basic correspondence
🔹 Handle incoming and outgoing documents and deliveries
🔹 Support internal teams with client coordination and document follow-ups
🔹 Maintain office supplies and liaise with suppliers
🔹 Ensure strict confidentiality of client information and compliance with office policies

Qualifications & Experience:
🔹 Diploma/Certificate in Business Administration, Office Management, or related field
🔹 1–2 years’ experience in a receptionist or front-office role (professional services firm preferred)
🔹 Professional appearance and excellent communication skills
🔹 Strong organizational and multitasking abilities
🔹 Basic computer skills (MS Word, Excel, email)
🔹 Experience in accounting, audit, legal, or corporate office is an added advantage

Why Join Adamjee Auditors?
✅ Be part of a respected, well-established professional services firm
✅ Work in a dynamic, supportive, and structured environment
✅ Opportunity for personal and professional growth
✅ Engage with clients across diverse industries
✅ Contribute to a culture of excellence, integrity, and teamwork

📍 Location: Nairobi, Kenya
📅 Application Deadline: 13th February 2026

How to Apply:
Send your CV to 📧 [email protected]

Only shortlisted candidates will be contacted. Kindly note: Only applications received via email will be considered. We politely request no LinkedIn messages regarding this role.

Most businesses don’t fail because they aren’t profitable. They fail because their numbers, tax position, and systems don’t inspire trust.

If you’re a CFO, founder, or growing business.... this is for you.

📩 Let’s talk.

[email protected]

https://adamjeeauditors.com/

KRA recently flagged over 392,000 Taxpayers, and It’s not by accident.

Earlier this week, Business Daily ran a headline many taxpayers shouldn’t ignore.

KRA identified over 392,000 taxpayers with compliance gaps, and this is a serious wake-up call.

This is not only about people who failed to file returns. KRA is now checking whether what you declared matches how money is actually moving in your accounts.

In simple terms 👇🏽

You could be flagged if:
1.You paid 3% or 5% tax and assumed the issue was closed
2.Your bank or M-Pesa inflows don’t match what you declared
3.Your rental income doesn’t match how the property is being used
4.Your return looks correct, but fails KRA system checks

Important to Understand
Low tax rates like Turnover Tax and Residential Rental Income Tax are meant to help KRA collect tax easily, they do not stop checks or audits.

If your figures don’t reflect what’s actually happening on the ground, KRA will still raise assessments.

What KRA Is Cross-Checking
1.Bank and mobile money transactions
2.eTIMS invoice data
3.Rental and property records
4.Third-party information

When the data tells a different story, KRA starts asking questions...and those questions maybe difficult to answer.

What Smart Taxpayers Are Doing Now
✔️ Reconciling bank and M-Pesa inflows with declared income
✔️ Confirming they’re on the right tax regime
✔️ Separating residential and commercial income correctly
✔️ Doing pre-audit clean-ups before any notices are issued

At Adamjee Auditors, we help individuals and businesses review their tax position, reconcile income, and fix issues early before they turn into penalties or assessments.

If your numbers haven’t been reviewed recently, now is the right time to do it.
A quiet clean-up today can save you a very loud problem later.

Talk to us
📧 Email: [email protected]
☎️ Call: +254 703 899 606

eTIMS has raised many valid questions for businesses, especially around transactions that don’t feel straightforward.

KRA has made provisions for cases where eTIMS is not practical or applicable. The key is understanding those provisions and applying them correctly in your records. If you feel confused or need better understanding we are only a phone call away. https://lnkd.in/ep9uhUUD

As a business person, you've probably heard of this by now... KRA is getting stricter about where your invoices are coming from. Not who issued them. Not when. But WHERE.

With the new eTIMS upgrades, invoices are now being tied to physical business locations, making fake or “borrowed” invoices much easier to spot. Interesting times ahead we must say.

The Kenya Revenue Authority (KRA) is taking a major step in strengthening VAT compliance through the introduction of georeferencing technology within the electronic Tax Invoice Management System (eTIMS).

Under this enhanced framework, electronic invoices will be tied to specific physical locations, such as a taxpayer’s registered business premises or service point.

In addition, KRA is conducting income and expenditure validation for the 2025 year, requiring taxpayers to substantiate declared expenses using eTIMS-generated invoices and third-party data sources. This significantly raises the risk of assessments, penalties, and audits for businesses with weak documentation or poor systems.

At Adamjee Auditors, we view these developments as both a compliance challenge and an opportunity for businesses to strengthen their tax governance.

Our team supports clients by:
-Identifying exposure to VAT and income tax risks arising from historical invoicing
-Assisting with income and expenditure reconciliations ahead of KRA reviews
-Supporting taxpayers facing Special Table restrictions, audits, or assessments

KRA’s move reinforces fairness in the tax system and protects compliant taxpayers. However, it also signals that reactive compliance is no longer sufficient. Businesses must ensure their tax systems, processes, and documentation can withstand increased scrutiny.

Audit season is coming… how ready are you? Be honest.

A: I’m basically KRA’s BFF 😎
B: I’m Googling ‘audit checklist’ right now 🤓
C: Can I just hide under my desk? 🫣

And the big question… which expense do you think your auditor will question first?

1. Travel & Entertainment – That “client lunch” that somehow became five-course nyama choma and drinks 😄
2. Employee Reimbursements – High-end laptops, expensive flights, and luxury hotel stays… all “for work purposes"
3. Miscellaneous – The category you use way too often… (we see you!) 👀
4. Office purchases that look personal – Laptops, phones, and fancy chairs… all “for office use”

😂 KRA notices these little things, so don’t wait till the auditor’s in your office.

But on a serious note: Need help surviving KRA audits? Visit our KRA Audit Survival Guide; https://lnkd.in/dbdr6mba

If you need any help or feel stuck, feel free to contact us:
📧 Email: [email protected]
☎️ Call: 0717 908241

“Who really holds the burden of proof in Kenya’s tax disputes... the taxpayer or KRA?”

A Nakuru-based trauma and general surgeon, Dr. Benjamin Magare‑Gikenyi, recently challenged a rule that quietly affects every Kenyan taxpayer. Under Section 56(1) of the Tax Procedures Act, KRA’s tax assessments are automatically presumed correct, forcing taxpayers to disprove them even when based on estimates or assumptions.

In other words:

-KRA assesses first

-You defend second

-Evidence often comes too late

Dr. Gikenyi argues this flips the presumption of innocence on its head, creating a system where compliance feels like a battle uphill rather than a partnership based on trust and evidence.

Why it matters to businesses:

-Tax disputes become expensive and fear-driven

-Settlements often prioritize pressure over fairness

-Trust in the system erodes, even for compliant taxpayers

If successful, this challenge could reshape how disputes are handled in Kenya, reduce compliance costs, and reinforce principles of evidence, transparency, and due process.

At Adamjee Auditors, we track these developments closely, because understanding the rules of proof isn’t just academic, it affects risk management, client advisory, and dispute resolution strategy.

The bigger question remains: Should tax compliance be built on trust and evidence or presumption and pressure? This is a case every Kenyan taxpayer should watch closely. It could redefine the rules of engagement between taxpayers and KRA.

That moment when you discover your limited company doesn’t have ONE… but TWO returns to file.

You’ve been diligently filing your KRA tax returns, then you realise there’s another obligation many directors miss:

Annual Returns with the Registrar of Companies (BRS).

Here’s where the confusion usually happens.

Annual Returns are NOT tax returns.

Their purpose is simple but critical: to officially inform the government whether there have been any changes in:

• Shareholding

• Directorship

• Registered office address

• Share capital

—or to confirm that nothing has changed.

When are they due?

They’re filed annually based on your company’s date of incorporation. For example, if your company was registered in June 2025, your first Annual Return is due June 2026, and every June thereafter.

(Newly registered companies are exempt in the first year.)

What happens if you don’t file?

This is where it gets costly:

• KES 500 penalty for every year an Annual Return is filed late

• Up to KES 200,000 fine for failure to file

• Persistent default may lead to the company being struck off the register

We see this issue often with companies trying to shut down, you cannot close a company with pending Annual Returns, even if it’s dormant. And yes even if you are the only director and shareholder, filing Annual Returns is still a legal requirement.

Before assuming you’re compliant this returns season, it’s worth understanding the difference clearly.

🔗 Learn more here: https://adamjeeauditors.com/annual-returns-vs-tax-returns-kenya-directors/

Business owners, CEOs, CFOs, pay attention. Did you hear about the KES 79M tax case lost… not on facts, but on procedure?

Yes, you read that right. Ainushamshi Construction & Transporters Ltd v Commissioner, Investigations & Enforcement (Tax Appeal Tribunal, Nov 2025) is a cautionary tale every Kenyan business needs to be aware of.

KRA escalated a tax demand from ~KES 14.8M to KES 79.27M, later reduced to KES 51.62M. The company had rock-solid arguments:

Bank deposits wrongly treated as income
Loans and director deposits ignored
Expenses excluded against the matching principle
VAT imposed on gross bankings

But even a clear Article 47 violation didn’t save them. Guess why? The Tribunal never even heard their arguments because;

Memorandum of Appeal and Statement of Facts were filed late
No leave was sought under Section 13 of the Tax Appeals Tribunal Act

The result: appeal struck out, no review, no relief, no second chance.
Hold your ears well and listen: In 2026, procedure is deadly. Missed deadlines = automatic defeat, no matter how strong your tax position.

At Adamjee Auditors, we advise as well as represent clients in tribunals, ensuring your case is heard on merit, not dismissed on a technicality. Don’t let procedural gaps cost you millions.

Your business is your sweat, your dreams, your legacy. Protect it. Check your tax compliance, equip your team, and have experts ready to fight for you, so one missed deadline doesn’t undo everything you’ve built.

Talk to us today
📧 Email: [email protected]
☎️ Call: +254 717 908 241
🌐 Website: https://lnkd.in/ep9uhUUD