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Brookhouse Ordered to Pay Ksh 140M After Lowering School Fees

  • Brookhouse International School has been ordered to pay Ksh140 million after lowering its school fees requirements for a section of its clientele.

    A report by Business Daily on Monday, May 3, indicated that the institution was ordered to part with millions as tax owed to Kenya Revenue Authority (KRA).

    The institution had reportedly subsidised tuition fees it offered to its staff members between 2010 and 2014.

    After a review carried by the taxman and whose revelations were made public in 2017, KRA claimed that the tax arrears amounted to as much as Ksh186.6 million.

    KRA offices in Nairobi.
    A file image of the reception area at KRA offices in Nairobi.

    The authority further disclosed that the arrears involved Pay As You Earn (PAYE), corporate tax and withholding tax.

    In its objecting, the management of the elite institution, however, argued that the law was so complex on how to value non-cash benefits companies according to their staff members.

    They further disputed the taxman’s computation of the benefits especially PAYE arguing that there was no clear legislation on school fees taxation.

    The institution also explained that it charged its teachers 15 per cent of the applicable school fees.

    After listening to the arguments, Justice Justice David Majanja ruled that the subsidised facility was taxable and that the management have an obligation to collect PAYE.

    “I find the commissioner’s position reasonable since staff members would pay the normal and ordinary school fees, which constitute the market rate, but for the employment-related benefit,” ruled Majanja.

    The school filed the appeal in April 2020 arguing that KRA erred in determining the total charges and was looking to have it revised to 10 per cent of the teachers’ pay.

    Brookhouse is a private institution ranked among the best and most expensive schools in the country.

    Kenya Revenue Authority Offices along Mombasa Road, Nairobi.
    Kenya Revenue Authority Offices along Mombasa Road, Nairobi.
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