1. What is TAB (Tax Amortisation Benefit Factor)?

Definition: TAB is a factor used to calculate the present value of tax benefits from amortizing intangible assets.

Purpose: It helps businesses and tax professionals in Kenya determine the tax benefits of amortizing intangible assets over time.

2. How Does the TAB Calculator Work?

The calculator uses the formula:

Where:

• \( TAB \) — Tax amortization benefit factor (dimensionless)
• \( T \) — Tax savings (KES)
• \( T_r \) — Tax rate (decimal, e.g., 0.3 for 30%)

Explanation: The tax savings are divided by (1 - tax rate) to account for the tax shield effect.

3. Importance of TAB Calculation

Details: Proper TAB calculation ensures accurate valuation of intangible assets and optimal tax planning for Kenyan businesses.

4. Using the Calculator

Tips: Enter the tax savings in KES and tax rate as a decimal (default 0.3 for Kenya's corporate tax rate). Tax rate must be between 0 and 1.

5. Frequently Asked Questions (FAQ)

Q1: What is the typical tax rate in Kenya?
A: Kenya's corporate tax rate is typically 30% (0.3 in decimal), but this may vary for specific industries or circumstances.

Q2: How do I determine tax savings (T)?
A: Tax savings are typically calculated as the amortization amount multiplied by the tax rate.

Q3: When is TAB used in financial analysis?
A: TAB is commonly used in business valuations, especially when valuing intangible assets like goodwill, patents, or trademarks.

Q4: Does this calculator account for Kenya's specific tax laws?
A: The basic formula is universal, but always consult a Kenyan tax professional for compliance with local regulations.

Q5: Can I use this for personal tax calculations?
A: This calculator is designed for corporate tax amortization benefits. Personal tax situations may require different calculations.