Kenya Among The Best In Tax Transparency And Exchange Of Information

By Soko Directory Team / Published April 19, 2024 | 8:30 am



Tax

Kenya has been rated ‘Largely Compliant (LC)’ on the implementation of the international standard for transparency and exchange of information on request (EOIR) for tax purposes.

This significant milestone for Kenya was announced during the 46th Peer Review Group (PRG) meeting at the OECD Conference Centre in Paris, France. The EOIR Peer Review report and LC rating for Kenya was subsequently approved and adopted by the Global Forum Plenary consisting of 171 member jurisdictions. This rating underscores Kenya’s favorable legal and administrative framework in tax transparency.

Mr. Humphrey Wattanga, Commissioner General, of Kenya Revenue Authority (KRA), led the Kenyan delegation consisting of representatives from KRA, the Financial Reporting Centre, and the Central Bank of Kenya during the PRG meeting. The representatives were part of the Kenya EOIR Peer Review Committee which consisted of technical representatives from the National Treasury, Business Registration Service, Central Bank, Financial Reporting Centre, Attorney General’s Office, Ministry of Lands, Law Society of Kenya, Institute of Certified Public Accountants of Kenya, Capital Markets Authority, Kenya Bankers Association and KRA.

The EOIR peer review encompassed a combined assessment of the legal and regulatory framework and implementation of the EOIR framework in practice as well as enhanced obligations on the Beneficial Ownership (BO) regime.

The EOIR standard requires the Global Forum members to ensure the availability of adequate, accurate, and up-to-date information on all relevant legal entities and arrangements and to ensure that tax administrations can obtain the information needed to assess taxpayers’ activities, regardless of where they take place.

All Global Forum members, including Kenya, commit to being peer-reviewed against the EOIR standard, through evaluation of the effectiveness of their legal and regulatory frameworks in practice. This thorough monitoring process ensures that the 171 jurisdictions are implementing the exchange of information standards effectively.

A positive EOIR rating is an indication that various government bodies and agencies in Kenya have adequate laws and practices in place that are in line with international standards. The positive rating also affirms Kenya’s ability to utilize Exchange of Information (EOI) for domestic resource mobilization.

International cooperation based on transparency and effective exchange of information standards for tax purposes has become a crucial tool in addressing global challenges of tax avoidance and evasion. According to the Tax Transparency in Africa 2023 – Africa Initiative Progress Report, Africa loses up to $60 billion annually in illicit financial flows.

As a member of the Global Forum, Kenya participates in a multilateral framework emphasizing tax transparency and EOI. This collaboration is pivotal in maintaining the integrity of the EOI standard and enhancing efforts to combat tax evasion, corruption, and money laundering. The Tax Transparency in Africa 2023 – Africa Initiative Progress Report highlights that African countries identified over EUR 310 million through EOIR between 2019 and 2022.

Kenya was also given eleven (11) recommendations to implement to enable the country to enhance its compliance with the international standards for transparency and exchange of information. KRA is engaging various agencies in developing strategies for the implementation of the review recommendations. Kenya is expected to update the Global Forum on progress made by 2026.

Read Also: Kenya Contributed 63.3% To KCB Group’s Profit Before Tax




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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