Thursday, March 28, 2024

US President Joe Biden demands KRA spy on US companies

US President Joe Biden’s administration is demanding that the Kenya Revenue Authority start spying and reporting on American businesses and investors engaged in money laundering and tax evasion in Kenya.

This demand is so serious that the US has made it a prerequisite condition to a trade deal Kenya is seeking with the US.

This demand means that Kenya is being asked to enforce an agreement that was signed in 2014 that requires Kenya to share information on tax evasion linked to US firms or investors involved in trade with America.

The tax agreement was signed in Washington on August 6, 2014, during the Barack Obama administration when Joe Biden was the vice president.

Once this demand is met, the Kenya Revenue Authority will be expected to gather and share information including income declarations, bank records and data on goods shipment with the US authorities. The KRA will also be required to allow its employees to appear as witnesses in the US courts.

KRA is also expected by the United States to seize and forfeit goods associated with tax evasion and money laundering breaches by Americans and investors with dealings in the US.

However, reports day that Kenya has been reluctant to authorize the KRA to spy on US companies. This is out of fear that corporates and investors will shy away from putting their money and businesses in the country.

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The large American corporations in Kenya include Cummins, Dupre Investments, General Electrics, Coca-Cola, IBM, Ormat Technologies, Alternate Systems, Mars, Mastercard and Microsoft. Others are Everstrong Capital, Uber, Netflix, Google, Amazon, Uber, and YouTube.

The Biden administration expects that once the agreement starts working, KRA will be obligated to alert it on firms that under-declare tax, especially custom duties. It should also inform Washington of firms whose actions could damage America’s public health, economy, security or other vital interests.

The 2014 agreement provides for the legal framework for the exchange of information and evidence to assist countries in the enforcement of customs laws, including duty evasion, trafficking, proliferation, money laundering, and terrorism-related activities.

“Upon request, a Customs Administration shall exercise special surveillance of persons known to the requesting contracting party to have committed an offence or suspected of doing so, particularly those moving into and out of its territory,” says the agreement.

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