While responding to a query by a local business publication, the Kenya Revenue Authority (KRA) said the Sh1 trillion was repatriated by some 16,000 applicants who took advantage of the amnesty window during which they were not required to declare the source of their wealth or even account for previous years’ tax arrears.
“We have received over 16,000 applicants with the amount repatriated so far at Sh1,014,058,103,551. The incentive was meant to encourage Kenyans to repatriate their wealth back to the country for purposes of development,” said KRA in a statement.
The amnesty programme, which was announced by Treasury Secretary Henry Rotich in 2016, is set to close next month. The incentive has since been extended twice to allow more uptake after potential applicants failed to take advantage fearing they would be subjected to provisions of Proceeds of Crime and Anti-Money Laundering Act.
The amount wired back is more than one third of Kenya’s annual budget.
With the return into the country of the over Sh1 trillion, the owners of the cash have effectively ‘cleaned' their wealth and evaded any questions on the source of the money or any tax liabilities that may have been due in the years before they made the declaration.
Wealthy Kenyans have traditionally stashed wealth abroad to either escape the taxman’s scrutiny or to spread their risks by investing in the more politically and economically stable Western democracies.
Kenya’s super-rich were holding more than Sh5 trillion in offshore tax havens across the world, a report by an American think tank, the National Bureau of Economic Research (NBER), last year revealed.
The colossal amount wired back which is more than one third of Kenya’s annual Budget has, however, not made a visible impact in the economy, raising questions on where the cash has been kept.
Audit firm Ernst and Young, in its analysis of the amnesty in March 2016, warned that the process was prone to abuse.
“The amnesty should be undertaken with precaution as there is the potential for abuse with respect to money laundering under the pretext of repatriating assets,” the firm wrote a day after KRA held a stakeholders meeting to get feedback on the guidelines provided for the amnesty.