THE INCOME TAX (NATIONAL SOCIAL SECURITY FUND) (EXEMPTION) RULES, 2002
L.N.97/2002Citation and Commencement.
1. These rules may be cited as the Income Tax (National Social Security Fund) (Exemption) Rules, 2002 and shall come into operation on the 1 st July, 2002.
Interpretation
2. In these rules, unless the context otherwise requires:-
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“Board of Trustees” means the National Social Security Fund Board of Trustees constituted under section 4 of the National Social Security Fund Act;
“accounting period” has the meaning assigned to it in section 2 of the Act;
“Commissioner” means the Commissioner of Income Tax;
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“ National Social Security Fund” means the National Social Security Fund established under section 3 of the National Social Security Fund Act and “ Fund” shall be construed accordingly.
Conditions for Exemption.
3. The income of the National Social Security Fund shall be exempt from income tax subject to the following conditions being complied with by the National Social Security Fund Board of Trustees-
(a) the Board of Trustees shall cause the accounts of the Fund to be audited every year;
(b) the Board of Trustees shall ensure that the annual audit includes -
(i) the determination of the market value of the assets of the Fund;
(ii) the determination of the surplus amount of the market value, not allocated to the account of a member of the Fund, excluding the reserve fund that does not exceed ten percent of the market value of the Fund in the year of audit.
(c) the Board of Trustees shall allocate the surplus amount to the respective accounts of individual members in proportion to the value of the amounts allocated to the accounts of all members of the Fund from time to time.
(d) the Board of Trustees shall cause the audit report to be published, in the Gazette and in at least two newspapers of national circulation within nine months of the end of the accounting period of the Fund and shall include a full listing of the assets of the Fund at book and market values;
(e) the Board of Trustees shall submit the annual audit report to the Commissioner within nine months of the end of the accounting period to which the audit report relates.
4. The Commissioner shall, within twelve months of the receipt of the Audit report under rule 3(e), send a report in writing to the Minister on the level of compliance with the conditions laid down in regulation 3 by the Board of Trustees.
5. Failure by the Board of Trustees to comply with the conditions of rule 3 shall cause the Board of Trustees to be liable to a penalty not exceeding ten thousand shillings for every such failure.
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