KRA offers amnesty for return of off-shore cash

KRA Commissioner General John Njiraini. (Photo: Standard)

Kenyans with money stashed in foreign banks and offshore assets have three weeks to notify the taxman, who has promised not to charge them any penalties.

Kenya Revenue Authority (KRA) has put out a notice to effect the National Treasury’s proposal to look the other way in accepting cash stashed overseas.

“Applicants for amnesty together with returns and accounts are to be received by the Commissioner before December 31,” said KRA.

However, the amnesty will not apply where the taxpayer is under audit or investigation relating to undisclosed income. The latest amnesty is expected enhance compliance levels, according to the authority headed by John Njiraini.

“Any person under tax audit, investigation on a matter of non-disclosure of income or an assessment has been issued to where tax interests and penalties are due does not qualify for the amnesty,” the notice reads.

KRA said it will be developing guidelines, which will be posted on its website, although the timelines given by the taxman before the exemption expires remain tight. The guidelines may be expected to define grey areas that tax specialists have raised, including whether the amnesty could be manipulated by tax cheats and money launderers, especially as we approach an election year.

Analysts pointed out that if the Government gives a blanket amnesty to repatriate the money tax-free, with no questions asked about the origin of such riches, it may open room for illicit money made through corrupt dealings finding its way back.

The Government can only attract money from offshore accounts if there existed assurance that it will not go after owners on tax evasion claims and give waiver on penalties. However, investigating agencies including the Ethics and Anti-Corruption Commission (EACC), Department of Public Prosecutions (DPP), Financial Reporting Centre (FRC) and the Asset Recovery Agency may not be bound by the amnesty, which means that they can still investigate the repatriated cash.

Kenya is emulating Singapore which attracted Sh1.018 trillion in four months after it announced the amnesty.