Kenya Committed to Global Tax Information Sharing Standards by 2022
The Kenya Government has reiterated its commitment in implementing international standards on transparency and exchange of information for tax purposes as part of a national effort to curb tax evasion and illicit financial flows.
Speaking at the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes Plenary virtual meeting, National Treasury Principal Secretary Dr Julius Muia assured global tax administration players that Kenya is on course to implement automatic exchange of information protocols on tax matters by September 2022.
Kenya, Dr Muia told the Global Forum delegates’, has taken decisive steps in implementing the international standards of exchange of information to help fight tax evasion.
These decisive steps to implement the two international standards of exchange of information are expected to greatly reduce the incidents of tax evasion as we shall have access to information that was previously not available to us, and this will enhance our capacity to address tax evasion and raise tax revenues for the benefit of our country,” Dr Muia said.
Ahead of the 2022 ratification, the Kenya Revenue Authority (KRA) tax auditors and investigators who are handling multi-national audits and investigations, he said, are already utilizing the exchange of information tools to obtain information that was not being disclosed by some taxpayers. This, he noted, will enhance the quality and accuracy of the tax audits and investigations that Kenya undertakes.
By undertaking this commitment, Kenya is among over 100 countries that are already exchanging information automatically and has made a voluntary commitment to commence information exchange by the year 2022 alongside Morocco and Georgia in2023.
This year, the overarching theme for the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes Plenary virtual meeting running through to Friday is: “Transparency for tax purposes in the time of COVID-19 –Working together to promote the fairness of tax systems and generate revenue.”
At the plenary meeting, National Treasury PS Dr Muia acknowledged that even as governments continue to grapple with the COVID-19 pandemic globally, multilateral co-operation on transparency and exchange of information for tax purposes is increasingly important to help them mobilize tax revenues and ensure that all taxpayers pay what is due.
“In Kenya, the national government and the Kenya Revenue Authority have committed to commence the exchange of information by 2022 and shall continue to extend our support for global actions aimed at meeting the current economic and administrative challenges as part of our National Post Covid-19 Economic Recovery Strategy,”Dr Muia said, adding that, “This commitment to the Global Forum and the implementation of the international standards of transparency and exchange of information is because Kenya appreciates the importance of international co-operation in addressing the challenges of tax evasion.”
At the Global Forum, delegates heard that new international standards on the automatic exchange of information for tax purposes have so far been satisfactorily implemented by countries worldwide, marking an important milestone in the global fight against tax evasion.
The first Peer Review of the Automatic Exchange of Financial Account Information report unveiled at the global forum shows that 88% of jurisdictions engaged in automatic exchange since 2017-18were deemed to have satisfactory legal frameworks in place. The report notes that a second stage of the monitoring process, now underway, will assess the effectiveness of automatic exchange in more than 100 jurisdictions.
The peer review report was presented during the first day of the annual plenary meeting of the Global Forum, which is bringing together ministers, high-level authorities and delegates from more than 100 member jurisdictions. The three-day meeting is focusing on how the tax transparency agenda can promote the fairness of tax systems while strengthening revenue mobilization. The event will highlight recent achievements and challenges in the context of the COVID-19 pandemic.
“The Global Forum continues to be a game-changer,” said OECD Secretary-General Angel Gurría. “In spite of the COVID-19 crisis, it has successfully delivered on the global peer review process, offering further proof that automatic exchange is becoming the global standard. Ensuring access to financial account information for tax administrations helps ensure everyone pays their fair share of tax, boosting revenue mobilization for countries worldwide, and particularly for developing countries.”
In2019, countries automatically exchanged information on 84 million financial accounts worldwide, covering total assets of USD 10 trillion. EUR 107 billion in additional tax revenues have been identified through voluntary disclosure programs, offshore tax investigations and related measures since 2009, an increase over the EUR 102 billion figure reported in 2019.
The Global Forum Secretariat provided technical assistance in 2020 to 59 developing country members, including training to thousands of officials, as part of efforts to strengthen tax collection capacity worldwide. “The battle for transparency is being fought on many fronts,” said Zayda Manatta, Head of the Global Forum Secretariat. “We are moving fast towards full implementation of the existing standards, and making every effort to ensure all our members benefit from them.”