EDITORIAL: Hidden wealth worrying
2 months ago, 11 Oct 18:10
Kenya, like many other Third World countries, grapples with illicit cash outflows in form of tax evasion by multinationals and local wealthy individuals stashing billions of shillings abroad.
The government has however put in place efforts to trace and recover such illicit cash hidden in popular havens including Bermuda, Switzerland, Cayman Islands, Channel Islands and the Isle of Man.
Treasury secretary Henry Rotich in the Finance Act 2016 provided for the tax pardon as an incentive to woo those with undeclared assets overseas to return them home as well as extending the June deadline to do so to next year. But going by the latest US-based think tank National Bureau of Economic Research’s report, super-rich Kenyans have hoarded Sh15 trillion in the offshore tax havens. This shows the incentives do not seem to have borne fruit.
The government needs to step up the push to repatriate the money. This can be achieved through homegrown incentives to encourage the individuals to return the money voluntarily or through legal sanctions.
Failure to act proactively and decisively on ill-gotten wealth will embolden corruption and money laundering cartels to continue enriching themselves at the expense of the taxpayers.
The latter should involve the government signing mutual legal assistance pacts with the havens of illicit cash like the Framework for the Return of Assets from Corruption and Crime in Kenya agreement President Uhuru and his Swiss counterpart Alain Berse signed in Nairobi last July.
Such deals would help to ensure an effective crackdown on wealth acquired through corruption, tax evasion and theft of public funds.
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