If you were to sift through the past two decades of the tax and commercial strategy advisory industry in the region, it would be hard to find an executive with broader range of experience than Philip Muema.
Philip is the managing partner of Andersen Tax in Kenya (formerly Nexus Business Advisory Limited), a member firm of Andersen Global. Prior to founding Andersen Tax in Kenya he was the head of tax and partner at KPMG East Africa.
While at KPMG, Philip was the project director behind the successful Kenya Top 100 survey which he also rolled out in Tanzania, Uganda,and Rwanda. As an accomplished business leader, he has spearheaded various policy and tax initiatives and public finance in Kenya.
StartUp Magazine spoke to Philip about life in the corporate world. We discussed Andersen’s positioning and its plan for the region.
Briefly tell us about your experience in professional tax and business advisory?
I have worked in the Tax advisory, commercial strategy and structuring environment for over 20 years. I began my career working at an Audit firm and by the time I made my exit, I was the Head of Tax and a Partner with an oversight mandate of their tax offering in 13 countries across the Eastern Africa region.
My passion for the entrepreneurship led me to establish the Top 100 Mid-Sized Companies’ Survey that we rolled out in Kenya, Tanzania, Uganda and Rwanda.
I have over the last decade engaged Treasury in discussions on tax matters aimed at bringing to the front the international best practices that Kenya can adopt to make its tax laws more efficient. My dedication and contributions in the tax profession led to my admission to ICPAK’s College of Fellows in 2016. I chair the Public Finance Committee of ICPAK and I am part of the steering Committee at ICPAK that is tasked with providing guidance on new tax laws.
Nexus Business Advisory recently became a full member firm of Andersen Global, how would you define this positioning?
Andersen Global is an international association of legally separate, independent member firms comprised of tax and legal professionals around the world. The firm made its entry into the Kenyan market through a collaboration agreement with Nexus Business Advisory Limited on October 1st 2017.
On 1st April 2018, Nexus Business Advisory Limited became a full member firm of Andersen Global and the second firm in Africa to officially adopt the name and brand of Andersen Tax. This is indeed a true testament of the confidence in the Kenyan market and the key role that our professionals play in the African market.
Joining Andersen global is the coming together of like-minded and similarly cultured firms that are committed to providing best-in-class service. The launch of the Andersen name in Kenya heralds a new dawn for tax practice in the East and Central African market. We look forward to the continued collaboration with the dedicated professionals in the global organisation as we continue to grow and expand into Africa’s key markets.
What are your new mandates/roles in view of the above?
Under the Andersen Tax brand, our firm will continue to provide tax and business solutions to individuals and corporations operating in East Africa and abroad, including services related to mergers & acquisitions, due diligence reviews, sell-side tax advice, transfer pricing, corporate tax, VAT, international tax, cross border tax planning, customs advisory, tax litigation, and employee compensation structuring. We are now growing into Organisational Development as well as Public Policy development.
As the Managing Partner of Andersen Tax, Kenya, I now sit on the Global Advisory Board of Andersen Tax and have been instrumental in the growth and expansion of the firm into the rest of Africa.
Why do businesses need professional tax and legal advice? What’s the impact?
Pay unto Caesar that which belongs to Caesar.
The government is a silent shareholder in any business and therefore it is important to ensure that our clients’ businesses are structured to limit their exposure and have them pay the requisite amount to the Revenue Authority. Our focus is to proactively manage tax on behalf of our clients so that our clients can focus on their core business.
All over the globe, the attitudes of investors, governments and corporations towards taxes are shifting. Many organizations now find that their tax decisions are under close scrutiny, compared to years gone by. Information sharing on various technological platforms has enhanced the efficiency of tax authorities in assessment of personal and corporate taxes, thereby increasing the potential for unforeseen tax liabilities. In light of these developments, the need for an experienced tax consultant cannot, therefore, be overemphasized. Given the complexity of business today, Andersen Tax commits to examining opportunities and challenges from every angle.
What are the predominant tax/legal challenges faced by businesses? Are there possible interventions?
I would say compliance and technical skills gap in the market. We do not have enough qualified tax professionals in the market and therefore businesses tend to rely on their accountants and auditors for tax advice. The administration of tax in businesses has over the recent years gained momentum since businesses recognize the need to be tax compliant. Tax is now a board room affair and not a back room matter anymore.
ICPAK is in the process of launching the Centre for Public Finance and Tax (CPFT). One of the key mandates of the CPFT will be to develop tax profession in Kenya and advance tax policy. This mandate is in line with one of our core values- Stewardship- Andersen Tax recognizes the need to invest in its people through continuous training and personal development. We shall work hand in hand with the CPFT to grow the tax profession in Kenya in the years to come.
Another challenge I would mention is the tax legal framework in Kenya. The government is keen on addressing this and we have seen that over the last five years, the government has been in the process of a tax modernization framework which has seen the country enact a new VAT Act, Excise Duty Act, Tax Procedures Act, Tax Appeals and Tribunal Act. In June of this year, The National Treasury finally released the much anticipated Income Tax Bill, 2018 for public debate and submissions as required by the constitution. The bill is set to overhaul the Income Tax Act, CAP 470 (ITA) which was enacted 44 years ago.
Transfer pricing has emerged as a challenge to companies which do business with their subsidiaries based outside the country. The simplification of transfer pricing regulations as well as the proposed changes contained in the Income Tax Bill 2018 and the ongoing exchange of information between jurisdictions have brought to closer scrutiny related party transactions.
Which emerging trends do you see in this space? How have they impacted in your operations?
Transfer pricing and Private Wealth and Client Services.
We have setup a fully-fledged transfer pricing unit and we are closely working with our colleagues in the African market in this key area. We are in the process of setting up a private wealth and client services division. We assist our clients with all of their personal taxes and family wealth matters ranging from income tax planning and compliance to setting up structures designed to achieve both operational and tax efficiency. Our services are designed to help our clients increase after-tax returns on private wealth because our team understands that when you are accumulating wealth, it’s not just how much you make but how much you keep that matters
Do you have future prospects we can look forward to?
In the next three years, we plan to have a well-entrenched brand in the industry, operate as the industry leader for tax advisory services and have a strong client base.
The ultimate goal of Andersen Global is not to be the biggest tax and legal firm in the world but to provide best-in-class client services in seamless fashion across the globe. Each and every one of the professionals and member firms that are part of Andersen Global share this common objective and are continuously working towards its realization.
Other pertinent issue?
Andersen is not just focused on businesses. We are quickly growing our Private Clients and Family Wealth portfolio in a bid to ensure that the business owners also have their personal matters in check. We assist our clients with all of their personal taxes and family wealth matters ranging from income tax planning and compliance to setting up structures designed to achieve both operational and tax efficiency.