Research

SECTION 4 SUBJECT NO. 10

TAXATION

STUDY TEXT

ii

TA X AT I O N

Copy r i ght

ALL RIGHTS RESERVED. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise without the prior written permission of the copyright owner. This publication may not be lent, resold, hired or otherwise disposed of in anyway of trade without the prior written consent of the copyright owner.

T E X T

ISBN NO: 9966-760-19-9 © 2009 STRATHMORE UNIVERSITY PRESS First Published 2009

S T U D Y

STRATHMORE UNIVERSITY PRESS P.O. Box 59857, 00200, Nairobi, Kenya. Tel: +254 (0) 20 606155 Fax: +254 (0) 20 607498

Design Concept & Layout - Simplicity Ltd - P.O Box 22586-00400 Nairobi. Email: info@simplicityltd.com

ACKNOWLEDGMENT

iii

Acknowledgment

We gratefully acknowledge permission to quote from the past examination papers of Kenya Accountants and Secretaries National Examination Board (KASNEB).

S T U D Y T E X T

S T U D Y

T E X T

iv

TA X AT I O N

v

Table of Contents

ACKNOWLEDGMENT ............................................................................................................ III TABLE OF CONTENTS ........................................................................................................... V

CHAPTER ONE ....................................................................................................................... 3 THEORY OF TAXATION .......................................................................................................... 3 CHAPTER TWO ..................................................................................................................... 37 TAXATION OF INCOMES OF PERSONS .............................................................................. 37 CHAPTER THREE ................................................................................................................111 TAXATION OF SPECIFIC...