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Saturday, September 19, 2020

KRA unable to trace Sh. 896 billion secretly wired from offshore banks

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Cash Hidden Abroad: The Kenya Revenue Authority has lost track of nearly Sh. 1 billion that was wired into Kenya from offshore accounts.  The money, whose actual figure stands at Sh. 896 billion, was wired back into the country following an amnesty on tax and source declaration.

According to a report that appeared in the Kenyan business newspaper Business Daily on Tuesday, KRA records show that 3,543 Kenyans repatriated Sh. 118 billion as at August 30.

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“This figure is low compared to the Sh. 1.014 trillion that the KRA declared on May 13, 2019 as cash wired back from offshore accounts by 16,000 Kenyans, leaving an unexplained balance of Sh. 896 billion. The taxman has in the past said it was uncertain whether the repatriated money was used for the intended purpose of development or shipped back to offshore investments after receiving clearance from the State,” the report said.

This revelation sheds light on how connected wealthy Kenyans are able to beat the system by stashing billions of money whose source cannot be accounted for abroad. In most cases, these funds include proceeds of corruption and money laundering.

According to the report in the BD, the three-year amnesty window to repatriate the billions stashed overseas tax-free and without declaring the source of wealth or even account for previous years’ tax arrears was the perfect breeding ground. It allowed corrupt individuals to clean their dirty money and then stash it outside the country in nations that could have otherwise questioned the source of the monies.

“The amount of money remitted through the amnesty was Sh. 118 billion and the amnesty had no tax consequences. The seekers were only required to declare to KRA foreign earned income and repatriate proceeds to Kenya by June 30, 2019. In absence, declaration made but funds repatriated later on or before June 30, 2024 would suffer a penalty of 10 percent of the repatriated funds,” the report quoted the KRA.

Some of the countries where corrupt Kenyans are fond of stashing stolen cash include Switzerland, Cyprus, Liechtenstein and Channel Islands.

A World Bank report in May this year said that Kenya’s political elite in the Moi/Kibaki era are accused of stashing more than Sh. 327.89 billion in offshore bank accounts over a two decade period when the country received billions in donor aid. Cash Hidden Abroad.

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