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Diaspora Remittances Hit Over 700 Billion Shillings in 3 Years

BY Soko Directory Team · May 10, 2019 06:05 am

Since the introduction of the Tax Procedures Act was amended in 2016, Kenyans in the diaspora have sent home 7.03 billion US dollars (approximately 711.02 billion shillings).

The cumulative foreign cash inflows in 2018 increased 39 percent to 274.37 billion shillings compared to 198.07 billion shillings in 2017.

Data from the Central Bank of Kenya showed that the foreign cash inflows hit the highest point in June and May 2018 to stand at 27.11 billion and 25.81 billion shillings respectively when the amnesty scheme was expected to close.

Nonetheless, Kenyans in the diaspora have continued contributing to the country’s income evidenced by the 664.9 million dollars (67.23 billion shillings) registered during the first quarter of 2019.

Remittance inflows grew 11.4 percent to 221 million dollars (22.3 billion shillings) in March 2019 from 199 million dollars (20.1 billion shillings) in February. This, however, was slower than the 244 million dollars recorded in January.

“North America remained the main source region for the remittances, accounting for 53 percent of the total remittances in March,” CBK said in its weekly bulletin.

The last time the Tax Procedures Act was amended was on April 3, 2017, and it extended the deadline to allow full amnesty provided the foreign income was declared and funds realized were transferred to Kenya no later than 30th June 2018.

Furthermore, the amnesty was stretched to 30th June 2019, despite concerns that it would lead to inflows of illicit cash including proceeds from corruption.

The government’s decision to extend the deadline date twice, as noted by experts at PriceWaterhouseCoopers (PwC), shows that the level of uptake thus far has been below expectation.

“It remains to be seen if this new extension will result in a flurry of new applications before the June 2019 deadline,” a report from the audit firm indicated.

PwC analysts also raised concerns over the wording of the law questioning whether or not Kenya should invest the remitted funds for a specific period of time.

“The present amnesty neither defines specific minimum investment period nor does it set out punitive measures for failure to maintain funds in Kenya,” PwC said.

About Soko Directory Team

Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system. Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory

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