Debunking the myth of transferring tax liability by contract

Times Tower in Nairobi, the headquarters of the Kenya Revenue Authority (KRA).

Photo credit: File | Nation Media Group

Picture this: You are contracted for a major infrastructure project involving a national government facility. The government issues an undertaking, in writing, that it will bear the tax obligation for certain elements of the project.

You factor this into your budget proposal and proceed to import materials and go ahead with the project with the legitimate expectation that the government will handle any payable taxes.

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Note: The results are not exact but very close to the actual.