Wealthy Kenyans With Billions Hidden in Offshore Accounts Rush to File Returns Ahead of Amnesty Deadline
As June 30th deadline to file returns with Kenya Revenue Authority (KRA) fast closes in, a section of rich Kenyans who have hidden assets overseas are rushing to return the assets to avoid paying taxes.
Tax consultants told Business Daily that the wealthy lot is repatriating the cash to avoid penalties and possible prosecution over tax evasion. This comes after the National Treasury announced a tax pardon as an incentive to woo Kenyans with undeclared assets in foreign countries to return them home.
In December last year, the Treasury extended the amnesty for another six months after delays by KRA to issue guidelines on filing and repatriating wealth hidden abroad.
Treasury promised that KRA would not trace the source of wealth declared and returned during the amnesty period. Tax consultants at audit firm PKF confirmed they have recorded an increase in clients seeking to file and return wealth stashed in offshore accounts in the past few months.
“Just as it is typical of Kenyans, in the last two-three months we have seen significant uptake of that amnesty and we think it is overwhelming for some of us to be able to accomplish the filing and repatriate those incomes,” PKF tax partner Michael Mburugu said.
“What we have seen is that a lot of money has been repatriated and there are many people waiting to do so. I cannot place a number to it, but generally it is running into billions of shillings.”
Reports indicate that more than Sh100 billion looted from government coffers over the years is hidden by Kenyans in tax-havens such as Jersey.
“We have seen an increase in that (uptake). This increment is largely because of the deadline because Kenyans have a way of running towards the last minute,” tax leader at EY East Africa Francis Kamau said.
Ashif Kassam, the Executive Chairman at audit firm RMS, said uptake of the tax pardon began last December after KRA made further clarifications on repatriation.
“It is a positive amnesty because it encourages people to bring in money and invest in the development of Kenya. The uptake has been good, it encourages local investments,” he said.