Taxman content after securing Sh138 million through international information exchange

For the first time Kenya has identified additional taxes through the EOI.

In Summary

• The Kenya Revenue Authority on Thursday welcomed the findings in a global report on Exchange of Information for Tax Purposes.

• The report dubbed ‘Tax Transparency in Africa 2020’ cites Kenya as one of the leading lights currently enjoying the benefits of an international effort to curb illicit financial flows.

The KRA headquarters at the Times Towers.
The KRA headquarters at the Times Towers.
Image: FILE

The Kenya Revenue Authority on Thursday welcomed the findings in a global report on Exchange of Information for Tax Purposes.

The report dubbed ‘Tax Transparency in Africa 2020’ cites Kenya as one of the leading lights currently enjoying the benefits of an international effort to curb illicit financial flows.

 According to the report, following the upscaling of Exchange of Information (EOI) treaties signing on the continent, eight African countries have secured $189 million (Sh18.9 billion) as additional tax revenues between 2014 and 2019 due from international sources.

This was mainly due to the growing number of countries joining the Convention on Mutual Administrative Assistance in Tax Matters.

KRA Commissioner General Githii Mburu said the report has aptly captured the progress made to curb illicit financial flows following the signing of international protocols focused on improving international tax cooperation through enhanced information sharing among the African Union (A.U.) member states.

He said the report acknowledges that significant progress has been made in fighting tax evasion and illicit financial flows in Africa, but further efforts are needed to support domestic revenue mobilisation.

“At KRA, we are encouraged by the positive and aptly captured outcomes which are as a result of the sustained application of international cooperation and exchange of information tools to tackle illicit financial flows,” Mburu said.

He added, “Countries that are destinations for these flows, including financial centres in Europe, Asia, America, the Caribbean and Pacific, now participate in the global effort to improve tax transparency and EOI for tax purposes thus helping to develop countries to prevent the outflows and identify the people involved”.

The Tax Transparency in Africa 2020 publication outlines the progress made by 32 African Union Member States, members of the Africa Initiative and three non-members.

The publication shows the progress achieved on the two cornerstones of the Initiative which are; raising political awareness and commitment, and developing capacities in tax transparency and exchange of information (EOI).

 

Tax transparency and EOI have a crucial role to play in helping African governments stem illicit financial flows (IFFs) and increase domestic revenue mobilisation.

According to the report for the first time, Kenya has identified additional taxes as a direct consequence of EOI.

Mburu said EOI has a huge potential for Kenya, and it has been putting a lot of effort to build up an effective EOI programme over the past two years.

“One concrete result is the sending of 19 EOI requests with already USD 1.3 million identified. With the ratification of the Multilateral Convention late in 2019, it is expected that Kenya will be sending more requests as the entry into force of the Convention will open avenues for exchanges with over 135 jurisdictions,” he said.

Mburu said having signed the Yaoundé Declaration in November last year, the Tax Transparency in Africa 2020 publication confirms that Kenya- through KRA -has managed to identify more than US$1.3million additional taxes arising from its international EOI requests.

This is an equivalent to Sh138,732,620.