Why tax amnesty on cash stashed abroad may be manipulated

Treasury formalised the amnesty through the Finance Act of 2016, by introducing a provision in the Tax Procedure Act granting the amnesty to taxpayers who earn taxable income from foreign sources. The deadline for the Amnesty was set to be December 31, 2017.PHOTO: COURTESY

When Treasury Cabinet Secretary Henry Rotich took to the podium during this year’s budget speech, he made an unprecedented decision. That wealthy Kenyans who have stashed cash abroad will get a blanket amnesty to repatriate the money tax-free with no questions asked about the origin of such wealth.

“Taxpayers who will take up this amnesty shall have all principal taxes, interest and penalties for the income year, 2016 and the prior year’s automatically remitted in total. In addition, the Government will not follow up on the sources of such incomes and assets declared,” Mr Rotich said in his budget speech.