DEEMED DIVIDENDS

Section 24 of The Income Tax Act in Kenya gives the Kenya Revenue Authority (KRA) the power to deem dividends on a taxpayer if it is satisfied that the only reason for the non-issuance of dividends is to evade taxation. This means that if the KRA believes that a taxpayer is deliberately withholding dividends to avoid paying taxes, it can take action to tax those dividends as if they had been issued.