The government, through Treasury Cabinet Secretary Henry Rotich, has devised a way of having cash reinvested in the country's economy as a way of recovering the billions lost in the recent major corruption scandals.
An amendment to the Tax Procedures Act in the Finance Act 2016 has introduced an amnesty for Kenyans holding money in overseas bank accounts to reinvest in the country.
The amnesty which was supposed to expire on June 30 before it was extended for another year and has been extended yet again by the Treasury CS.
According to CS Rotich, the amnesty extension is attributed to its slow uptake, and also so as to have individuals help in the growth of the economy following the billions lost.
[caption caption="Treasury Cabinet Secretary Henry Rotich addressing the parliament"]
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"In 2016, the Tax Procedures Act was amended to provide a tax amnesty on income declared for the year 2016 by a person who earned taxable income outside Kenya. In 2017, I extended the period from December 30, 2017, to June 30, 2018, for the year of income 2016," Rotich noted.
He, however, divulged that despite the extension in 2017, the uptake was low partly due to concerns that when the monies are returned, questions will be raised regarding the source as required by Financial Reporting Centre.
"In this regard, and in order to encourage the uptake of the amnesty, I propose to extend the period of amnesty from June 30, 2018, to June 30, 2019, and the year of income declaration to be 2017," Rotich commented.
However, financial experts have pointed out that in as much as the state intends to have billions invested in the Kenyan economy, the amnesty to implement the law according to them is likely to encourage money laundering.
Kuna Ajmera, a partner at Tax and Audit firm Grant Thornton noted that the law leaves room for abuse since all one may need to do is bank the ill-acquired mone in an account abroad, in countries referred as tax have like Mauritius,and the Virgin Islands, then return it under amnesty the government asking questions.
"By barring prosecution under the Proceeds of Crime and Anti-Money Laundering Act, would-be offenders can now take advantage of this window. However, one may argue that the proposed amendment would be empty in its enforceability," Ajmera affirmed.
Additionally, Ajmera mentioned that there are concerns over what other scrutiny those who repatriate the cash will be subjected to since the law bars the Commissioner for Domestic Taxes from further questioning the source of the income of the money.
A top banker at an Asian-owned lender revealed to the Standard that Kenyans have stashed huge cash in overseas tax havens that the Treasury is eyeing.
[caption caption="NYS scandal suspects during a past court hearing before they were granted bail by the High Court"]
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