Government moves to combat illicit financial flows

Acting Treasury CS Ukur Yatani

The Government has stepped up efforts to curb illicit financial flows (IFFs) out of the country through the signing of a crucial continental declaration.  

The National Treasury Acting Cabinet Secretary Ukur Yatani has provided the much-needed shot in the arm for the Kenya Revenue Authority (KRA) efforts to tackle illicit financial flows through the Yaoundé Declaration. 

While welcoming commitment by the Government, KRA Commissioner General Githii Mburu said the instrument focuses on improving international tax cooperation through enhanced information sharing among the African Union (AU) member states to curb illicit financial flows. 

"KRA is encouraged by the Government's swift moves to prioritise the signing of international treaties that will accelerate efforts to curb international tax evasion," Githii said.  

In a communique to the Chairperson of the Global Forum on Transparency and Exchange of Information for Tax Purposes Ms Maria-Jose Garde, Yatani said Kenya has joined the Yaoundé Declaration and will support its commitments. 

“I hereby join the Yaoundé Declaration and add Kenya’s weight to its commitments,” Yatani said.

 “Kenya is encouraged by the Yaoundé Declaration and its call for action to tackle illicit financial flows in Africa through improved international tax cooperation. This is a clear message from African Ministers on the fight against tax evasion, which we need to enunciate at the right level across the continent." 

According to the Organisation for Economic Co-operation and Development (OECD), the global landscape for fighting tax evasion and avoidance have changed substantially over the last few years.  

International cooperation and exchange of information (EOI) have emerged as vital tools in tackling illicit financial flows (IFFs). Countries that are destinations for these flows, including financial centres in Europe, Asia, America, the Caribbean and Pacific, now participate in the global effort to improve tax transparency and EOI for tax purposes thus helping to develop countries to prevent the outflows and identify the people involved.

 It estimated that Africa loses between Sh5 and Sh6 trillion each year through IFFs. This includes money from tax evasion and other criminal activities (corruption, money laundering, etc.) which undermine Africa’s development and governance agenda. The report also identifies ways to tackle IFFs, including through EOI and improved international tax cooperation.