Apex Business Advisory, a Market Leader in Tax and Business Consulting

By June Njoroge

Sacco Times Magazine had the privilege of interviewing the Managing Director at Apex Business Advisory Limited; a leading consulting firm in Kenya offering unmatched specialized business and tax advisory expertise to both private and public institutions, among them Savings and Credit Co-operative Societies (SACCOS). She shares her in-depth experience in this dynamic field in an exclusive interview:

Q. Briefly tell us about Apex Business Advisory Ltd.

A. Apex Business Advisory Ltd (Apex) is a consulting firm made up of business and switched-on tax advisors who offer specialized Business and Tax Advisory expertise to both private and public businesses as well as individual persons. Apex is headquartered in Kenya with regional presence in East Africa and spreading its wings to the global sphere.

Apex core expertise lies in the ability to support our clients in understanding, analyzing and executing business and tax advice in diverse economic environments. Our team of consultants have developed in-depth knowledge of key different industry sectors with a deep focus on the Co-operative movement in Kenya (i.e. SACCO’s at large). We also serve clients in other sectors such as financial, educational, manufacturing, FMCG, agricultural, mining, oil and gas, transport, technological, hospitality and tourism among others. At Apex, we pride ourselves with the good relationship we have built with our clients and the revenue authority over time and thus assisting us to offer the best quality services to our clients.

Q. Savings and Credit Co-operative Societies (SACCOS) form part of your clientele. Could you expound on this business relationship/how you work with them?

A. With the immense value SACCOs are adding to the society,

Apex felt the need to be part of this huge impact and thus has been working closely with SACCOs in Kenya. This cordial relationship has grown deeply through the value addition we give to SACCOs through our various services such as tax health check, managing KRA audit, outsourcing tax function, tax trainings, ad-hoc advisory services and offering business advisory services such as investment diversifications in order to yield high returns for the members while at the same time safe guarding members money. Further, we assist SACCOs in tax planning to ensure only what is necessary is paid to the Revenue Authority and identify ways to reduce SACCOs tax burden.

Q. What are some of the services that Apex Advisory Ltd has tailor made for Saccos?

A. Mrs Shallom Kimuyu, Managing Director at Apex Business Advisory Limited.

1. Tax health-check services- We conduct in-depth reviews of the SACCOs operations and identify any tax exposures, quantify them, offer alternatives ways to settle the liabilities and future ways to mitigate them; 2. Managing KRA audits- We assist SACCO’s to handle the

KRA in case of a compliance audit check, minimize the tax liability demanded by KRA, represent them in case of an on-going litigation and offer practical solutions at all times; 3. Outsourcing tax function- We handle on a month to month tax obligations on behalf of a SACCO and thus relieving the SACCO’s management the headache of dealing with the tax matters. This is critical as the management now focuses on growing the core business rather than wasting time figuring out what laws have changed or not;

4. Tax trainings- We offer tailor made tax trainings programs to SACCO staff, Board members and associations to sensitize them on tax issues affecting them and keeping them up to date with changing legislations; 5. Tax planning- We assist SACCOs to structure their operations in the right way to minimize tax burden without any omission or evasion; 6. Tax lobbying- At Apex we also assist associations lobby for favorable tax policies in cases where unfavorable laws have been proposed. 7. Ad-hoc Services- on a need basis, we offer tax and business solutions to our clients

Q. What are some of the benefits that Saccos stand to gain from partnering and acquiring services from Apex

Business Advisory Ltd.

A.

• Personalized tax services and customized solutions with a friendly working team; • Huge tax savings and minimal tax burdens; • Relieving the pressure to be up to date with the changing tax legislations; • Amicable and favorable payment plans where assessments have been issued by the Revenue authority; • Minimal future tax exposures; • High chances of waiver of penalties and interest where voluntary disclosure is done to the Revenue Authority by

Apex Business Advisory Ltd • High SACCO growth rate as Management focuses on core business of the SACCO

Q. Briefly define the gap for tax advisory services to the

Sacco Movement in Kenya.

A. Most SACCOs have evolved their services from the traditional back office services to the Front office services. Further, different FOSA incomes and expenses such as board allowances, honoraria, and dividends attract the attention of the tax man. All this affects the tax treatment posing a challenge to many SACCOs on how to tax each item. The

Revenue Authority has noticed this huge knowledge gap and thus use it as an avenue to slap SACCOs with hefty tax liabilities.

Q. From your stand point, what advice would you give

Saccos across the country regarding the services Apex

Business Advisory Ltd offers?

A. Its critical for SACCOs to put a keen and deep attention to the tax and business needs of the organization, by onboarding Apex Business Advisory to offer solutions that are practical. This will highly boost their value to their members, as well as the compliance levels with the SASRA and the Revenue Authority (KRA).

Compliance: How Saccos Can Navigate Tax Issues in Their Operations

Savings and Credit Co-operative Societies (SACCOS) in Kenya are thriving and growing rapidly. However, key among the issues crippling the sector is tax, given the changing tax landscape in the country which poses a great challenge to the lucrative institutions.

Failure to give it the desired attention causes a huge business risk; making them easy targets to the Kenya Revenue Authority (KRA) for non-compliance. More compliance audits and reviews ensure that more SACCOs are brought into the tax bracket and are contributing to the national tax revenue.

In light of this, SACCOs ought to be in tune with the changing legislations in order to minimize tax exposure. For instance, effective 1st July 2021, the Kenya Finance Act introduced excise duty on loan processing fees; very few SACCOs effected this change in their operations immediately. This is one of the many tax laws that show how dynamic the tax laws are.

In addition, with most SACCOs transitioning their operational model to activities such as FOSA or dealing with non-members, again poses a critical risk of being treated as commercial banks.

Recently, there have been various tax rulings revealing that most SACCOs lack the information and necessary capabilities, in managing this aspect of the business and tax risk. This results in unwarranted penalties and interest liabilities.

Traditionally, the tax function in SACCOs was delegated to the internal/ external auditors and accountants which has always resulted in the aforementioned tax exposures.

Therefore, its vital for the board to always budget for this consultancy cost on a continuous basis. This benefits SACCOs to grow, rightfully implement tax planning strategies and pay minimal taxes.

All these changes imply that the right strategy, implementation and continuous consultation with a seasoned tax consultant, will save the SACCOs resources such as time, funds which could otherwise be allocated to product development.

Writer: Shallom Kimuyu, Managing Director at Apex Business Advisory Limited Email: shallom.kimuyu@apexadvisory.co.ke/ info@apexadvisory.co.ke