Wealthy Kenyans return Sh118 billion stashed in foreign countries
Wealthy Kenyans return Sh118 billion stashed in foreign countries: Wealthy Kenyans filed to return Sh118 billion assets from foreign countries in the final year of a tax pardon, official data shows.
The value was declared for repatriation in the period ended June 2019 after the Treasury extended the amnesty process by a year.
The Kenya Revenue Authority (KRA) received 3,543 amnesty applications in the period, a report submitted to the National Assembly’s Committee on Finance and National Planning shows.
In extending the time for declaring and returning the riches stashed abroad, suspended Treasury secretary Henry Rotich had cited lack of clarity on whether the cash repatriated home should be subjected to provisions of Proceeds of Crime and Anti-Money Laundering Act.
That law requires persons transacting Sh1 million and more to declare the source of their wealth to the Financial Reporting Centre, the anti-money laundering agency.
“The amnesty was extended for a further year and assurance given that once the money is transferred, there will be no follow-up on the source of the funds,” KRA says in the report.
“The amendment was meant to allow more time for persons seeking amnesty and create favourable environment for repatriation of funds.”
The exemption, however, excluded people who accumulated riches abroad from crimes of terrorism, poaching and drug trafficking.
“That was supposed to be a sweetener, but practicability part of it is that it was not possible because if I bring the money, you may not tell the source,” said Mr Stephen Waweru, a senior tax services manager at KPMG. “They may not have fully succeeded because of a bit of mistrust around whether it was a way for KRA to net them after they declare and go for them in future,”
The income declared from wealth abroad, including homes, during the year-long extension appears to be lower than what had been disclosed between mid-2017 and 2018.
The KRA, in a statement to the Business Daily in May, said about Sh1 trillion had been declared by 16,000 applicants since the window opened.
The blanket amnesty was initially to end in December 2017, but was extended twice to June 2019 following a delay by the taxman to issue guidelines on repatriation of wealth stashed in offshore accounts.
The forgiveness on tax and accruing penalty and interest initially targeted foreign-earned income up to the period ended December 2016, but this was pushed forward to December 2017.