Deductibility

Deductibility

Whether an expense may be subtracted from income in computing taxable profit.

Also called

You will also see this written as allowable expense and tax deductible. Kenyan businesses use these interchangeably in conversation even where the underlying things differ, which is worth knowing when someone tells you what you need.

Where you meet this

Deductibility is the question of whether an expense can be subtracted from income before tax is computed. It is the single commercial reason invoicing discipline pays for itself: unsupported expenditure is taxed as though it were profit. The exposure usually sits on the buying side rather than the selling side, which is where businesses tend not to look.

What it sits alongside

In Kenyan business records deductibility sits alongside Tax invoice, Purchase invoice and Income tax. The pages for each explain how they connect.

Related terms

• Tax invoice
• Purchase invoice
• Income tax
• eTIMS
• Tax audit

Common questions