10/09/20

AFRICA: KRA cannot trace KSh 896 billion wired by wealthy Kenyans from offshore accounts.

As published on tuko.co.ke, Wednesday 9 September, 2020.

The Kenya Revenue Authority (KRA) cannot trace KSh 896 billion that was wired by wealthy Kenyans from offshore accounts.

The money was channeled home after KRA gave a three-year tax amnesty to rich individuals who were allowed not to declare their source of wealth. 

According to the latest records by the taxman, over 3,500 Kenyans repatriated KSh 118 billion as of August 30 this year compared to KSh 1.014 trillion registered in a similar period in 2019 by at least 16,000 citizens. 

“The amount of money remitted through the amnesty was KSh 118 billion and the amnesty had no tax consequences. The seekers were only required to declare to KRA foreign earned income and repatriate proceeds to Kenya by June 30, 2019.

“In absence, declaration made but funds repatriated later on or before June 30, 2024 would suffer a penalty of 10% of the repatriated funds," KRA said in a statement according to Business Daily. 

This left a balance of KSh 896 billion which could not be accounted for.

A while back, the government agency said it was not certain whether the said billions were used for the intended purpose or were shipped back to offshore accounts.

A July 2018 report by the Tax Justice Network revealed Kenya was one of the biggest tax havens for the rich who were seeking to keep their offshore financial activities secret to evade high taxes.

The Tax Justice Network’s Financial Secrecy report seen by TUKO.co.ke indicated Kenya had an extremely high secrecy score. 

"Kenya, which has been assessed for the first time in the 2018 Financial Secrecy Index (FSI), has an extremely high secrecy score of 80/100," the report revealed.