Kenya: KRA generates nearly 1 billion shillings in revenue from recovering tax evasion data
Nairobi – The Kenya Revenue Authority has increased its revenue by nearly 1 billion shillings in 2021 through the adoption of the EOI (Exchange of Information) Unit which helps jurisdictions tackle tax evasion and fraud. illicit financial flows.
According to the Africa Tax Transparency Progress Report 2022: Africa, Kenya’s use of EOI has resulted in an increase in revenue realized with 130 million shillings in 2019, 10.5 million shillings in 2020 and 985.2 million shillings in 2021.
“The country’s use of EOI has steadily increased from 1 request in 2018 to 17 in 2019, 73 in 2020 and 173 in 2021 and this is expected to increase in 2022,” the report notes.
Kenya committed to EOI in 2014 and committed to launch its first automatic exchange of financial account information in September 2022 to further increase revenue.
In the year ending June 2021, KRA surpassed its revenue raising target, raising 1.669 trillion shillings against an initial target of 1.652 trillion shillings.
According to the report, Kenya recorded the highest number of inquiry requests with 173 in 2021, accounting for 45% of all requests sent by African countries.
He estimates that African countries have earned more than $1.3 billion in incremental revenue over the past eight years, including taxes, interest and penalties through offshore tax investigations partly driven by EOI requests. .
Launched in 2014, the Africa Initiative Task Force chaired by KRA Commissioner General Githii Mburu ensures that member states are equipped with an EOI unit, tracking systems, delegation of Competent Authorities (CA) and an EOI manual to combat tax evasion.
“I would like to commend the members of the Africa Initiative for their commitment and resilience in implementing tax transparency standards during the difficult times occasioned by the COVID-19 pandemic,” Mburu said.
While showing rapid and positive developments, the report highlights uneven progress in the region.
Four countries alone accounted for 92% of all requests sent by African countries in 2021; and so far, four of the six countries assessed in the second round of EOIR peer reviews have been found partially compliant, showing common challenges in implementing the EOIR standard, which includes advanced beneficial ownership requirements.
“The Global Forum will continue and intensify its efforts to actively promote the transparency agenda in Africa,” said Zayda Manatta, Head of the Global Forum Secretariat.
“We look forward to helping to further develop local capacity, for example through our train-the-trainer program, to achieve more transparent tax systems for the benefit of all African countries and their citizens.”