The bone of contention in this matter was treatment of education benefit enjoyed by employees of brookhouse group of schools. The law provides for two ways of bringing the benefit to tax, that is taxing it on the employee (through PAYE) according or section 5(4)d and 5b of the income tax act CAP 470 or taxing it on the employer according to section 16(2)(a)(iv). Section 5b requires determination of the market value of the benefit and comparing it with the cost to the employer. This section was found to be general and given that there is an alternative way of bringing this benefit to taxation through section 16(2)(a)(iv, the tribunal preferred that option.
