The Kenya Revenue Authority (KRA) cannot trace Ksh896 billion wired back into the country after the taxman offered tax amnesty to the owners of the money.
In March, KRA announced that 16,000 Kenyans had wired Ksh1.014 trillion bacj=k into the country from offshore accounts.
The government had offered the Kenyans a three-year amnesty window since 2016 to repatriate the billions tax-free. During that period, they would not required to declare the source of their wealth or even account for previous years’ tax arrears.
It is suspected that the money, most of it thought to have been stolen from public coffers, was wired back to offshore accounts immediately after being cleared by state.
Read: KRA Sets Up Special Unit For Digital Taxation
“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 percent of the repatriated funds,” KRA told Business Daily.
Most of the money was hidden in offshore accounts in countries with less tax restrictions such as Switzerland, Cyprus, Liechtenstein and Channel Islands.
Having cleaned the money, the taxman might not have a strong legal basis to go after the owners of the money, who might have looted the country.
KRA has also not signed agreements with tax authorities in 130 countries for exchange of income information, that would enable it track Kenyans’ wealth invested abroad.
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