Kenya’s wealthiest class are still using the offshore accounts to hide ill-gotten trillions, evade taxes and steer clear of Kenyan laws.
According to a newly published report, Kenya’s super-rich are holding more than Sh14.8 trillion ($148 billion) in offshore tax havens across the world.
American think tank National Bureau of Economic Research (NBER) reports that individuals, who form the cream of Kenya’s wealthiest are still using the offshore accounts to hide ill-gotten trillions, evade taxes and steer clear of Kenyan laws.
“Among the countries that created a lot of shell companies (relative to the size of their economy), one finds Jordan, Russia, Taiwan, the UAE, Venezuela, Zimbabwe and Kenya,” the report says, adding the list is made of countries with high offshore wealth to GDP ratios,” the report says.
Kenya’s Tax Procedures Act was amended in 2016 to introduce Section 37B which grants a tax amnesty on foreign income that that was earned on or before 31 December 2016 and is subject to tax in Kenya.
Section 37B was later amended on 3rd April 2017 to provide full amnesty if the foreign income is declared and the funds that were realised are transferred to Kenya no later than 30th June 2018.
At Sh14.8 trillion, the estimated amount of black money held by Kenyans abroad is nearly five times Kenya’s 2018-19 Sh3 trillion budget.
The NBER report indicates that Kenyans holding undisclosed funds in foreign banks have not made use of a State tax amnesty to declare the money and repatriate it to remain eligible.
The findings were made public yesterday as experts called on the Treasury to introduce more incentives for wealthy Kenyans to return their wealth.