Your bank account details will soon be shared with the taxman.
This is after Kenyan commercial banks started to implement the Common Reporting Standards (CRS), a tax procedures regulation of 2023.
This regulation requires all Kenyan banks, trusts, and other financial institutions to report and share information about foreign account holders with the Kenya Revenue Authority (KRA) as the taxman steps up its efforts to nab tax evaders and beneficiaries of illicit wealth.
The announcement has left customers jittery over their exposure.
The Kenya Bankers Association (KBA) said the taxman has requested data that includes account stakeholders, address, jurisdiction, residence, tax identification number such as the Personal Identification Number or functional equivalent, as well as date and place of birth.
Further, banks will also be expected to submit the account balance or value including cash value or surrender value for cash value insurance contracts or annuities respectively.
They will also be expected to present the amount paid or credited to the account for each calendar year together with the total gross amount of interest, the total gross amount of dividends, the total gross amount of other income generated concerning assets held in the account, the total gross proceeds from the sale or redemption of financial assets in that year or other reporting period concerning which the financial institution acted as a custodian, broker, nominee or otherwise as an agent for the account holder for custodial accounts.
The bankers association said all the information will be submitted electronically using technology approved or provided by the commissioner (KRA) and in the format required by the taxman to ensure security of data being shared as required by the regulations.
“Sharing of customer’s data under CRS framework is in accordance with the provisions of Data Protection Act section 25 that provides for principles and obligations of personal data protection as well as Section 48 that provides for conditions to transfer of personal data outside Kenya,” said the association.
The bankers said the regulations will also require them to update details of pre-existing accounts to ensure compliance with the regulations, noting that it could lead to an increase in the cost of compliance by banks and other RFIs.
The move is likely to affect the sector in many ways.
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