Tax planning is the arrangement of tax affairs in business activities of a tax payer, be it an individual or a body corporate, in such a way so as to achieve the lowest possible tax liability, at the lowest possible cost, without flouting any tax laws or regulations tax planning can be carried out for any form of taxation e.g. VAT planning, income tax planning and customs and excise tax planning. A good tax planner, who must be a tax specialist, needs to gain deeper understanding of the tax legislation coupled with a sound knowledge of case law in taxation.
The work of an established tax practitioner involves:-
- Tax compliance work, which involves assisting tax clients comply with the law, by ensuring that all requirements of the law are adhered to and
- Tax consultancy work, which involves tax planning. This involves offering tax advice in various tax situations
The departments of KRA work to ensure a high rate of compliance and preventing loss of revenue. Tax planning has therefore been a battle ground for lawyers and accountants on the one hand, searching for loopholes in the legislation to avoid tax and revenue department on the other, out to maximize on revenue collection
Wilfykil answered the question on February 26, 2019 at 05:52
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