Kenyans making money abroad get one-year tax amnesty
From next year, Kenyans who work, do business or own property outside the country risk huge penalties for not disclosing their incomes for taxation back home.
The Kenya Revenue Authority has given a one-year tax amnesty to December 31, 2017 for tax payers in the diaspora to file their returns for the year ended December 31, 2016. Those who fail to do so will be investigated for assessment of taxes due, interest and penalties.
“We are asking these people to voluntarily come forward and take advantage of the tax amnesty. We are aware there are Kenyans holding assets overseas,” the deputy commissioner in-charge of the policy and co-ordination unit at KRA James Ojee told reporters in Nairobi Tuesday.
Mr Ojee said that those who declare their incomes during the amnesty period will have their taxes, interests and penalties for the previous years including 2016 waived.
The National Treasury plans to raise Ksh300 billion ($3 billion) by taxing income generated by individuals, businesses and properties held abroad, to finance part of its Ksh2.6 trillion budget in the 2017/2018 fiscal year.
The prime targets include athletes, footballers, artists, consultants and auditing firms.
KRA said regulations on how to catch tax evaders residing outside Kenya would soon be gazetted after the Cabinet Secretary for the National Treasury Henry Rotich signed a multilateral tax information exchange agreement in Paris.
It allows 120 tax jurisdictions worldwide to share confidential information on individuals’ tax obligations.
“We are just waiting for the gazette notice. Once it is gazetted then we are up and running. This is going to form the basis for investigations,” said Mr Ojee. ““Those who come forward will be happier than those who say let us wait and see.”
He said that the rate of tax compliance in Kenya is very low with less than two million of the 10 million eligible tax payers paying taxes.