Source: https://www.tuck.com

When it comes to success, we all know the stereotype: the successful don’t sleep. Whether it’s a tech CEO leading a risky new startup or a famous author working on her latest best-seller, everyone believes that earning more means working more, and working more inevitably means sleeping less. It’s a trade-off most of us expect to make eventually, if we’re not making it already.

Yet when it comes to scientific data to back up this idea, there’s often not much to be found. At Tuck, we wanted to know: how does the sleep/work trade-off really work? Is it really true—statistically true—that sleeping less means earning more? Might there be exceptions to the rule? And how do specific careers compare with one another in this regard?

Without clear answers, we decided to take scientific matters into our own hands. To get to the bottom of these questions, we went straight to one of the most authoritative sources available: the Bureau of Labor Statistics’ 2016 American Time Use Survey. Published annually since 2004, the American Time Use Survey gives analysts, journalists, and social scientists a comprehensive look at how Americans spend their days—including those huge time-takers, work and sleep.

The BLS dataset for 2016 included data from about 10,000 respondents. We used this data to run a regression analysis, which gave us the relationship between hours worked and hours slept we were looking for (read about our complete methodology below).

The results were fascinating. On the one hand, we confirmed some hunches (such as that those in legal professions would, on average, be the highest paid while working the most and sleeping the least). On the other, some results were less predictable. Scientists and architects saw quite high weekly pay, while getting close to average sleep, for instance. And teachers, who you might expect to be both low earners and low sleepers, fell almost exactly at the average in both categories. Though the rule was generally true—the more you work, the more you earn, and yes, the less you sleep—there were a few big exceptions to be found. What you’ll learn about coders will definitely surprise you.

These kinds of comparisons between professions were the real fruit of our analytical labor. Finally, we compiled them into gorgeous charts and assembled them into a handy infographic, to make reading and understanding these findings as pleasant and informative impossible. Check it out, find your job on the charts, and see how your own work and sleep numbers compare to those of other careers.

Our Findings

Methodology/Research

Data Transformations

The data used for this report was sourced from the Bureau of Labor Statistics’ (BLS) American Time Use Survey for 2016, a survey with roughly 10,000 respondents. We hope to gain some insight about American sleep patterns from the survey. To do this, data has been compiled from three sources:

1) The ATUS Respondent data file, which contains employment and wage information about respondents
2) The ATUS Roster data file, which contains respondents’ basic information such as age and gender
3) The ATUS Activity Summary data file, which contains total time slept per 24 hour period of the ‘diary day’ during which activities are recorded

Data for the linear model is reformatted and modified only to include employed respondents with basic wage and hours worked information (e.g. respondents who did not provide that information were not included) reducing the dataset to 3165 respondents, and moderately limiting the generalizability of any results to the population at large.

Data for the occupation averages is also reformatted to only include respondents with wage, hours worked, and occupation code information, and surveyed on weekdays, limiting the set to just over 1500 respondents. Differences in the the ‘employed’ vs ‘not employed’ sets may be attributable to subjective states of employment (full time / part time, contractor etc) that are not accounted for in this analysis.

With additional resources, the BLS data could be re-weighted to accommodate for generalizability but for now the report should be treated as an exploratory analysis.

Linear Model
Independent variables were added one by one (a hierarchical regression) to the model according to how well correlated they were to the dependent variable (minutes slept) and a qualitative assessment of relevance.

The order of inclusion is as listed in the table below.

At each step, variables were assessed for significance; no variables were dropped from the analysis as all showed as significant. VIF gave no indication of issues of multicollinearity at any stage in the regression.

	ESTIMATE	STD. ERROR	T VALUE	PR(>|T|)
(Intercept)	649.58105114	11.71207275	55.463	< 0.0000000000000002	***
WEEKLY WAGE	-0.00012170	0.00002939	-4.142	0.00003538856	***
WEEKLY HOURS WORKED	-0.36624540	0.14400680	-2.543	0.01103	*
MONDAY	-85.33333466	7.28848977	-11.708	< 0.0000000000000002	***
TUESDAY	-99.26489203	7.45254723	-13.320	< 0.0000000000000002	***
WEDNESDAY	-84.82596687	7.50065494	-11.309	< 0.0000000000000002	***
THURSDAY	-91.44458188	7.71517698	-11.853	< 0.0000000000000002	***
FRIDAY	-98.51182464	7.59262418	-12.975	< 0.0000000000000002	***
SATURDAY	-35.80854986	5.83709677	q-6.135	0.00000000096	***
AGE	-1.05792752	0.18897410	-5.598	0.00000002351	***
MALE	-9.42782764	4.33410636	-2.175	0.02968	*
CHILDREN	-5.41919328	1.92972135	-2.808	0.00501	**

The Raw Numbers:

CENSUS_OCCUPATION	CODE	WEEKLY WAGE AVERAGE	WEEKLY WAGE STD	WEEKLY HOURS AVERAGE	WEEKLY HOURS STD	SLEEP AVERAGE (MINUTES)	SLEEP STD (MINUTES)
Personal care and service occupations	PCS	362.73	369.54	24.47	19.9	543.13	144.36
Food preparation and serving related occupations	FPS	398.17	240.23	30.39	16.5	541.76	133.35
Healthcare support occupations	HCS	426.47	279.71	31.31	15.53	472.57	135.64
Building and grounds cleaning and maintenance occupations	BGCM	430.1	281.51	30.55	17.07	495.51	126.81
Farming, fishing, and forestry occupations	FFF	487.68	352.26	38.46	13.81	480.33	88.34
Office and administrative support occupations	OAS	755.36	476.57	35.84	14.33	485	100.36
Production occupations	P	823.84	537.59	39.48	14.86	488.79	128.29
Transportation and material moving occupations	TMM	826.07	638.8	39.4	16.28	506.52	153.35
Sales and related occupations	SR	843.76	765.22	38	17.81	490.97	116.94
Community and social service occupations	CSS	900.04	546.81	36.38	16.57	488.17	111.59
Installation, maintenance, and repair occupations	IMR	956.17	415.39	42.46	11.42	462.71	90.04
Education, training, and library occupations	ETL	963.4	640.54	37.07	17.4	472.28	95.52
Construction and extraction occupations	CE	967.52	552	37.46	17.05	457.11	88.11
Arts, design, entertainment, sports, and media occupations	ADESM	1046.82	747.95	32.73	16.93	434.21	91.72
Protective service occupations	PS	1108.41	709.98	41.89	20.15	445.31	159.21
Healthcare practitioner and technical occupations	HCPT	1180.9	682.78	37.68	15.13	472.12	133.27
Business and financial operations occupations	BFO	1364.53	760.55	40.8	12.08	459.68	95.66
Management Occupations	MGMT	1476.97	780.06	43.57	14.1	460	89.68
Life, Physical, and social science occupations	LPSS	1654.36	810.06	41.51	15.88	468.08	140.62
Architecture and engineering occupations	AE	1678.96	696.01	42.85	9.75	465.73	81.85
Computer and mathematical science occupations	CMS	1752.05	719.75	42.41	9.99	477.62	87.46
Legal occupations	L	1833.48	817.43	42.38	14.67	432.56	93.82
AVERAGES		1010.808636	NA	37.595	NA	477.28	NA

Fair Use

If you appreciate what you’ve learned here about sleep and labor, please feel free to share our graphic as well as the data as you wish. We simply ask that you link back to this page to credit Tuck as the author of this content.

TURNOVER TAX (TOT)

The turnover tax was re-introduced in the Finance Act 2019 effective 1^st January 2020 with similar regulations previously applied.

Notable changes are;

• Monthly submission of the TOT returns by 20^th of the following month.
• Presumptive tax is still applicable in addition to the TOT
• Presumptive tax can be claimed as a credit against TOT payments.

Previous regulations include;

• 3% TOT on gross turnover. No expenses deductible.
• Gross turnover should not exceed 5 million a year.
• TOT does not apply to Limited Companies, Employment Income, Management Income, Professional Income, Rental Income, and VAT registered individuals or businesses with over 5m turnover a year.
• Commissioner approval is required to remain in the normal income tax regime.
• Late submission penalty – Kshs. 5,000 for each month.

PRESUMPTIVE TAX (PT)

Presumptive tax remains at 15% of the single business permit.

Notable changes as a result of the Finance Act 2019;

• PT is no longer a final tax.
• PT can be claimed as a credit against TOT payable.

Previous regulations that are still effective;

• Payable by individuals to whom a business permit or a trade license is issued by the County Government.
• Payable at the time of payment for the County Government business permit or trade license.
• Commissioner approval is required to remain in the normal income tax regime.
• PT does not apply to Limited Companies, Employment Income, Management Income, Professional Income, Rental Income and VAT registered individuals’ or businesses with over 5m turnover a year.
• Late submission penalty – 5% of the PT due.

FINANCE ACT – SUMMARY OF TAX CHANGES

• Income earned by an individual in the Ajira Programme is exempt from tax for the first three years on set criteria.
• The amount withdrawn from the National Housing Development Fund to purchase a house by a contributor who is a first-time homeowner is exempt from tax
• The amount of affordable housing relief shall be 15% of the employee’s contribution but shall not exceed KES 108,000 per annum.
• Plastics recycling plant will be entitled to a reduced corporate income tax rate of 15% for the first five years upon commencement of its operations.
• Import Declaration Fee (IDF) to 3.5% of the customs value of goods imported for home use.
• IDF reduced to 1.5% on the customs value of raw materials imported by manufacturers, approved imports by the CS and input for the construction of homes under the affordable housing scheme approved by CS.
• Railway Development Levy (RDL) from 1.5% to 2% of the customs value of goods imported for home use.
• Withholding VAT reduced to 2%.
• Non-registered persons importing taxable services will now be required to account for reverse VAT.

Excise Duty rate changes

Excise Duty rate changes – Other items (Sin Tax)

INDIVIDUAL TAXATION

A person is considered to be tax resident in Kenya if they:

• have a permanent home in Kenya and were present in Kenya for any period in a particular year of income under consideration, or
• do not have a permanent home in Kenya but were:
  • present in Kenya for 183 days or more in that year of income, or
  • Present in Kenya in that year of income and in each of the two preceding years of income for periods averaging more than 122 days in each year of income.

Individual Tax Bands and Rates

Monthly Pay Bands-1st January 2018	Annual Pay Bands-1st January 2018	Rate of Tax
1     –       12,298	1 – 147,580	10%
12,299   – 23,885	147,581- 286,623	15%
23,886   – 35,472	286,624 – 425,666	20%
35,473   – 47,059	425,667 – 564,709	25%
Above 47,060	Above 564,710	30%
Personal Tax Relief
1,408.00	16,896.00

• Residential rental income – 10% of gross residential rental income received payable monthly before the 20^th of the following month. Annual gross residential rental income should not exceed 10 million shillings.
• Life, health and education relief is 15% of the premium paid but cannot exceed Kshs. 60,000 p.a
• Affordable housing tax relief – 15% of gross emoluments at a maximum of Kshs. 108,000 p.a (Starts at time of application and awaiting allocation of a house under the affordable housing scheme)

• Mortgage interest on the owner-occupied house at a maximum amount of Kshs. 300,000 p.a is deductible
• Gratuity and payments to a registered pension scheme are deductible to a maximum of Kshs. 240,000 p.a but cannot exceed 30% of the emoluments.
• A homeownership savings plan – Contributions not exceeding Kshs. 96,000 p.a is deductible.
• Bonuses and overtime paid to low-income earners is tax-free.
• 2,000 per day allowance for traveling for an individual outside his normal place of work is tax-free.

TAXABLE EMPLOYEE BENEFITS

• Motor vehicles benefit taxed at 2% of the cost of the vehicle or the prescribed rate; whichever is higher.
• Telephone and mobile is taxed at 30% of the cost to the employer
• Furniture – 1% of the cost to the employer
• Housing – higher of the market rate or actual rent paid or 15% of total employee income.
• Employee loans are subject to Fringe Benefits Tax (FBT)

MONTHLY NHIF CONTRIBUTIONS

Changes in NHIF Regulations;

• Limit cover to a maximum of one spouse and five children
• New members will have to wait for 90 days before accessing services or benefits in addition to making a one year upfront payment within the 90 days waiting period.
• Late payment of contributions will attract a fine of 50% of the monthly contribution and a requirement to pay one year in advance. Benefits and services will be restricted for a period of 30 days.
• Defaulting for more than 12 months will require re-registration and benefits and services can only be accessed after 90 days of resuming payments. A one year upfront payment will be required.
• Access to specialized services shall be restricted to 6 months waiting period following card maturity for new members.
• Access to maternity benefit will be restricted to 6 months waiting period following card maturity for both principal members and spouse declared.
• Any dependent declared after registration shall be subject to the 6 months waiting for the period for specialized and maternity services.
• For inpatient and medical outpatient, additional dependents will be eligible for the benefit apply after 30 days waiting period. The same applied for a change of spouse.
• Government-funded programs like free maternity, health insurance subsidy, elderly persons with severe disabilities and Inua Jamii have been exempted from these changes

On Saturday 1st June 2019, the Central Bank of Kenya announced that it shall be issuing new generation notes, and specifically for the Kshs 1,000 note currently in circulation would cease to be legal tender from 1st October 2019.  See links below

Launch of New Generation Banknotes

Click to access New-Generation-Banknotes-Pamphlet.pdf

Click to access 1727542341_Governor’s%20Remarks%20-%20Launch%20of%20the%20New%20Generation%20Banknotes.pdf

(CBK – Governors full speech)

The Governor of the Central Bank of Kenya in this remarks on the launch said “ Your Excellency, the new banknotes will circulate alongside those previously issued but not withdrawn. However, we have assessed the grave concern that our large banknotes—particularly the older one thousand shillings series—are being used for illicit financial flows in Kenya and also other countries in the region. More recently we have seen the emergence of some counterfeits. These are grave concerns that would jeopardize proper transactions and the conduct of commerce in our currency. To deal conclusively with these concerns, all the older one thousand shillings series shall be withdrawn. By a Gazette Notice dated May 31, 2019, all persons have until October 1, 2019, to exchange those notes, after which the older one thousand shillings banknotes will cease to be legal tender. “

This has created a panic situation as Kshs 1,000/= notes held by individuals and organized crime syndicates are likely to offload these in the economy either by banking into bank accounts, purchasing high-value vehicles from motor dealers, purchasing gold, other precious metals and gemstones from jeweler’s and gemstone traders, purchasing property from property developers and estate agents or even general goods paying in cash which has been hoarded and may be proceeds of physical crime, proceeds of economic crime and corruption, money accumulated but not declared for tax purposes (tax evasion), all this would be covered under the term “money laundering”. Thus businesses should be vigilant to not becoming unknowingly conduits for and accessories to money laundering. Kenya has a PROCEEDS OF CRIME AND ANTI-MONEY LAUNDERING ACT (CHAPTER 59B), which covers these offenses.

Money laundering is defined as: ‘The funneling of cash or other funds generated from illegal activities through legitimate financial institutions and businesses to conceal the source of the funds.’  Anti-Money Laundering, 2nd ed., IFAC, 2004

Key Definition’s 1/2

“Agency Director” means the Director of the Agency appointed under section 53(2);

“authorised officer” means—

(a) a police officer;

(b) an officer of the department of the Kenya Revenue Authority;

(c) Agency Director; or

(d) any person or class of persons designated by the Minister as an authorized officer to perform any function under this Act;

“Board” means the Anti-Money Laundering Advisory Board established under section 49;

“Centre” means the Financial Reporting Centre established under section 21;

“confiscation order” means an order referred to in section 61

“designated non-financial businesses or professions” means—

(a) casinos (including internet casinos);

(b) real estate agencies;

(c) dealing in precious metals;

(d) dealing in precious stones;

(e) accountants, who are sole practitioners or are partners in their professional firms;

(f) non-governmental organizations;

(g) such other business or profession in which the risk of money laundering exists as the Minister may, on the advice of the Centre Director,

“estate agency” in connection with the selling, mortgaging, charging, letting or management of immovable property or of any house, shop or other building forming part thereof, means doing any of the following acts—

(a) bringing together, or taking steps to bring together, a prospective vendor, lessor or lender and a prospective purchaser, lessee or borrower; or

(b) negotiating the terms of sale, mortgage, charge or letting as an intermediary between or on behalf of either of the principals;

“financial institution” means any person or entity, which conducts as a

business, one or more of the following activities or operations—

(a) accepting deposits and other repayable funds from the public;

(b) lending, including consumer credit, mortgage credit, factoring, with or without recourse, and financing of commercial transactions;

(c) financial leasing;

(d) transferring of funds or value, by any means, including both formal and informal channels;

(e) issuing and managing means of payment (such as credit and debit cards, cheques, travelers’ cheques, money orders and bankers’drafts, and electronic money);

(f) financial guarantees and commitments;

(g) trading in – (i) money market instruments, including cheques, bills, certificates of deposit and derivatives; (ii) foreign exchange; (iii) exchange, interest rate and index funds; (iv) transferable securities; and (v) commodity futures trading;

(h) participation in securities issues and the provision of financial services related to such issues;

(i) individual and collective portfolio management;

(j) safekeeping and administration of cash or liquid securities on behalf of other persons;

(k) otherwise investing, administering or managing funds or money on behalf of other persons;

(l) underwriting and placement of life insurance and other investment-related insurance; and

(m) money and currency changing;

“money laundering” means an offense under any of the provisions of sections 3, 4 and 7;

“offense” in this Act, means an offense against a provision of any law in Kenya, or an offense against a provision of any law in a foreign state for conduct which, if it occurred in Kenya, would constitute an offense against a provision of any law in Kenya;

“person” means any natural or legal person;

“proceeds of crime” means any property or economic advantage derived or realized, directly or indirectly, as a result of or in connection with an offense irrespective of the identity of the offender and includes, on a proportional basis, property into which any property derived or realized directly from the offense was later successively converted, transformed or intermingled, as well as income, capital or other economic gains or benefits derived or realized from such property from the time the offense was committed;

“property” means all monetary instruments and all other real or personal property of every description, including things in action or other incorporeal or heritable property, whether situated in Kenya or elsewhere, whether tangible or intangible, and includes an interest in any such property and any such legal documents or instruments evidencing title to or interest in such property;  property of every description, including things in action or other incorporeal or heritable property, whether situated in Kenya or elsewhere, whether tangible or intangible and includes an interest in any such property and any such legal documents or instruments evidencing title to or interest in such property;

“reporting institution” means a financial institution and designated nonfinancial business and profession;

Relevant Sections of the Act

Offenses penalized under Section 16 (1)

3. Money laundering

A person who knows or who ought reasonably to have known that property is or forms part of the proceeds of crime and—

(a) enters into any agreement or engages in any arrangement or transaction with anyone in connection with that property, whether that agreement, arrangement or transaction is legally enforceable or not; or

(b) performs any other act in connection with such property, whether it is performed independently or with any other person, whose effect is to—

(i) conceal or disguise the nature, source, location, disposition or movement of the said property or the ownership thereof or any interest which anyone may have in respect thereof; or

(ii) enable or assist any person who has committed or commits an offense, whether in Kenya or elsewhere to avoid prosecution; or

(iii) remove or diminish any property acquired directly, or indirectly, as a result of the commission of an offense, commits an offense.

4. Acquisition, possession or use of proceeds of crime

A person who—

(a) acquires; (b) uses; or (c) has possession of, property and who, at the time of acquisition, use or possession of such property, knows or ought reasonably to have known that it is or forms part of the proceeds of a crime committed by him or by another person, commits an offense.

7. Financial promotion of an offense

A person who, knowingly transports, transmits, transfers or receives or attempts to transport, transmit, transfer or receive a monetary instrument or anything of value to another person, with intent to commit an offense, that person commits an offense.

Offenses penalized under Section 16 (2)

5. Failure to report suspicion regarding proceeds of crime

A person who willfully fails to comply with an obligation contemplated in section 44(2) commits an offense.

8. Tipping off

(1) A person who—

(i) knows or ought reasonably to have known that a report under section 44 is being prepared or has been or is about to be sent to the Centre; and (ii) discloses to another person information or other matters relating to a report made under paragraph (i).

(2) In proceedings for an offense under this section, it is a defense to prove that the person did not know or have reasonable grounds to suspect that the disclosure was likely to prejudice a report made under subsection (1).

11. Failure to comply with the provisions of this Act

(1) A reporting institution that fails to comply with any of the requirements of sections 44, 45 and 46, or of any regulations, commits an offense.

13. Misuse of information

(1) A person who knows or ought reasonably to have known—

(a) that information has been disclosed under the provisions of Part II; or

(b) that an investigation is being, or maybe, conducted as a result of such a disclosure, and directly or indirectly alerts, or brings information to the attention of another person who will or is likely to prejudice such an investigation, commits an offense.

Offenses penalized under Section 16 (3)

12. Conveyance of monetary instruments to or from Kenya

(3) A person who willfully fails to report the conveyance of monetary instruments into or out of Kenya, or materially misrepresents the number of monetary instruments reported in accordance with the requirements of subsection (1) commits an offense.

Offenses penalized under Section 16 (4)

9. Misrepresentation

A person who knowingly makes a false, fictitious or fraudulent statement or representation, or makes, or provides, any false document, knowing the same to contain any false, fictitious or fraudulent statement or entry, to a reporting institution, or to a supervisory body or to the Centre, commits an offense.

10. Malicious reporting

Any person who willfully gives any information to the Centre or an authorized officer knowing such information to be false commits an offense.

14. Failure to comply with the order of the court

A person who intentionally refuses or fails to comply with an order of a court made under this Act commits an offense.

16. Penalties

(1) A person who contravenes any of the provisions of sections 3, 4 or 7 is on

conviction liable—

(a) in the case of a natural person, to imprisonment, for a term not exceeding fourteen years, or a fine not exceeding five million shillings or the amount of the value of the property involved in the offense, whichever is the higher, or to both the fine and imprisonment; and

(b) in the case of a body corporate, to a fine not exceeding twenty-five million shillings, or the amount of the value of the property involved in the offense, whichever is the higher.

(2) A person who contravenes any of the provisions of sections 5, 8, 11(1) or 13 is on conviction liable—

(a) in the case of a natural person, to imprisonment for a term not exceeding seven years, or a fine not exceeding two million, five hundred thousand shillings, or to both and

(b) in the case of a body corporate, to a fine not exceeding ten million shillings or the amount of the value of the property involved in the offense, whichever is the higher.

(3) A person who contravenes any of the provisions of section 12(3) is on conviction, liable to a fine not exceeding ten percent of the amount of the monetary instruments involved in the offense.

(4) A person who contravenes the provisions of section 9, 10 or 14 is on conviction liable—

(a) in the case of a natural person, to imprisonment for a term not exceeding two years, or a fine not exceeding one million shillings, or to both and

(b) in the case of a body corporate, to a fine not exceeding five million shillings or the amount of the value of the property involved in the offense, whichever is the higher.

(5) Deleted by Act No. 51 of 2012, s. 6.

(6) Where any offense under this Part is committed by a body corporate with the consent or connivance of any director, manager, secretary or any other officer of the body corporate, or any person purporting to act in such capacity, that person, as well as the body corporate, shall be prosecuted in accordance with the provisions of this Act.

17. Secrecy obligations overridden

(1) The provisions of this Act shall override any obligation as to secrecy or other restriction on disclosure of information imposed by any other law or otherwise.

(2) No liability based on a breach of an obligation as to secrecy or any restriction on the disclosure of information, whether imposed by any law, the common law or any agreement, shall arise from disclosure of any information in compliance with any obligation imposed by this Act.

Why tax evasion is also considered part of money laundering?

Businesses cannot hide under the pretext I know the person, he is a business person and not a criminal, by accepting payments in Kshs 1,000 notes for major capital assets purchases like vehicles, real estate properties, jewelry, and gemstones, because the person may be a genuine business person but has evaded tax.

Tax evasion

Tax evasion must be addressed effectively for a number of reasons. At first, it deprives states from raising sufficient revenues, therefore, preventing them from implementing social, economic, environmental, cultural and other policies. Tax evasion undermines the efforts of the government to promote the welfare and social cohesion; it prevents it from performing its social function. Moreover, it erodes the credibility of democratic institutions, while injuring the trust of citizens in the means and ends of a legitimate, democratic government. In a nutshell, it can brew feelings that might evolve into anti-social, anti-democratic mentalities.

Secondly, those who are in a better position to avoid taxation are the people who can siphon their income into foreign banks or jurisdictions, which usually means that they are better off. In avoiding their duties and responsibility vis-á-vis society and the state, the tax evaders are in effect placing a greater burden on those who eventually pay off the effective costs of taxation, who are in their majority, members of the lower and middle parts of the income distribution. As such tax evasion fosters or widens social inequality while it produces a de facto division of citizens between privileged and non-privileged.

Thirdly, tax evasion provides incentives to established financial institutions as well as authorities or politicians to engage in corrupt activities, in quest of their own enrichment or other benefits. Financial institutions/banks are interested in increasing their profits by making use of this stream of funds, even if that implies circumventing the existing rules5. Authorities may be enticed to turn a blind eye in this process, so that their own position in power may be consolidated.

What Processes should you have to have in Place

Customer due diligence

Suitable customer due diligence measures is the bedrock of anti-money laundering requirements and the first line of defense for any business. This means:-

1) identifying and verifying the customer’s identity using documents, data or information obtained from a reliable and independent source where applicable, identifying the beneficial owner and taking risk-based and adequate measures to verify their identity using government-issued identity document and tax record (PIN)

2) obtaining information on the purpose and intended nature of the business relationship conducting ongoing monitoring of the business relationship.

This ongoing monitoring should include:

Scrutiny of transactions undertaken throughout the business relationship. This is to ensure that transactions are consistent with the accountant’s knowledge of the client, the business and risk profile.

Ensuring that documentation, data or information held is kept up to date, and carefully filed in hard copy.

Stages of CDD

Information gathering -Verification, Risk assessment and Identification

Verification

• Who is the client? • Who owns them?  • What do they do?  • What is their source of funds?
• Can you describe their activities? •  What will you be doing for them? • What is its legal structure?

Risk Assesment

• Client risk
• Service risk
• Geographic risk
• Sector risk
• Delivery channel risk

Identification

• What documents or other information do you need to demonstrate what you have been told is true?
• What steps do you need to take or what information do you need to obtain to mitigate any specific risks that you have identified?

The identification phase requires the gathering of information about a client’s identity and the purpose of the intended business relationship. Appropriate identification information for an individual would include full name, date of birth and residential address. This can be collected from a range of sources, including the client. In the case of corporates and other organisations, identification also extends to establishing the identity of anyone who ultimately owns or controls the client. These people are the ‘ultimate beneficial owners’ (UBOs), and further guidance on how to deal with them can be found in paragraph 5.1.14.

The next stage of CDD is risk assessment. This should be performed in accordance with and must reflect the purpose, regularity, and duration of the business relationship, as well as the size of transactions.

Conclusion: Money laundering is a serious offense, hence vigilance is important,  where you bank or invest your money, you will most likely have to disclose the source of the cash, so be careful as you transact with any person, who you have the slightest doubt. Do not accept to help a friend, in disguising source of funds, you would be personally liable.

Our Locations

ACE House, Narok Road                                                    TRV Centre, 7^th Floor, Office No. 7F

P.O. Box 16916 – 80100                                                     3^rd Parklands Avenue

+254 727399199,  041 2491515                                   Tel: +254 721 524680,  707 688699

Mombasa                                                                                   Nairobi

Contacts

CPA Ahmed Salyani –Managing Partner asalyani@acegroup.co.ke

CPA Mohamed Ebrahim—Partner mebrahim@acegroup.co.ke

Muhamed Salyani (ACCA) —Consulting director, msalyani@acegroup.co.ke

Bilal Musani, (ACCA) – Tax Director bmusani@acegroup.co.ke

CPA Mohamed Afzal Mamdani—Nairobi Office  mamamdani@acegroup.co.ke

Find us on the Web:

Home

http://acegroup.co.ke/

Beyond Excellence

Our Professional Services Entities:

Ace Associates- Certified Public Accountants –

Ace Consultants Limited—Accountancy, Internal Audit, Strategy and Risk  Consulting

Ace Taxation Services Limited—Tax Compliance, Planning, and Advisory Services

Ace Financial Advisory Limited—Corporate Finance and Personal Financial Planning

ACE Secretaries and Registrars  – Company Secretarial Services

Our Contacts

Mombasa                                                                          Nairobi

ACE House, Narok Road                                                TRV Centre, 7^th Floor, Office No. 7F

P.O. Box 16916 – 80100                                                  3^rd Parklands Avenue

+254 727399199 or 041 2491515                                 Tel: +254 721524680 or +254 707688699

Websites: www.acegroup.co.ke  : www.acefinancialadvisory.com

Caveat

The content of this bulletin is for informational purposes only. The content is not intended in any way to be a substitute for legal advice, in making decisions, and the authors and the entities affiliated with them are not responsible for any loss, resulting from acting on this information. This information is driven by announcement by the Central Bank of Kenya on the new currency notes and the ceasing of the current Kshs 1,000 note as legal tender by 1st October 2019 and the  PROCEEDS OF CRIME AND ANTI-MONEYLAUNDERING ACT (CHAPTER 59B)