Treasury Cabinet Secretary (CS) Prof. Njuguna Ndung’u approved new regulations that will allow the Kenya Revenue Authority (KRA) to access bank accounts owned by Kenyans in 106 countries and territories.
The accounts targeted by the new regulations include those hosted in Switzerland, Mauritius, the British Virgin Islands (BVI), the Cayman Islands, and Bermuda among others.
Under the new regulations, all financial institutions will be required to provide KRA with information such as names, addresses, residences, and the date and place of birth of account holders.
Furthermore, the institutions will be required to furnish the Authority with tax identification numbers foreigners’ bank account numbers, and beneficiaries in a move that aims to bolster the government’s efforts to stop tax evasion and increase tax revenue.
The Finance Act of 2021 established the Common Reporting Standard through the introduction of Section 6B to the Tax Procedures Act (TPA).
TPA on the other hand allowed the Treasury CS to issue regulations to guide the implementation of the CRS which details the reporting and due diligence procedures to be followed by Reporting Financial Institutions (RFIs) like banks.
The CRS is similar to the Foreign Account Tax Compliance Act (FATCA) of the United States of America.
FACTA requires foreign RFI’s, whether financial or non-financial institutions, to provide information about US account holders with the US Internal Revenue Service (IRS).
Kenya is a signatory to the CRS Multilateral Competent Authority Agreement (CRS MCAA) and the latest move will help with the government’s intention of instilling tax transparency.
Furthermore, the new regulations will enable Kenya to exchange financial account information with over 100 jurisdictions globally.
Previously, President Ruto set a target for KRA to have a tax revenue of Ksh4.8 trillion by June 2027.
Among the strategies that the President suggested towards meeting this target was the increasing of the tax base to bring in more people into the tax bracket.
