Report: Rich Kenyans hiding Ksh457 billion in offshore accounts

Dollars. [Photo courtesy]

A recently released report by the Tax Justice Network and Global Alliance reveals that some KSh457 billion has been hidden by wealthy Kenyans in offshore accounts.

The effect of this is that it has deprived the country of Ksh6.9 million in terms of taxes, the State of Tax Justice 2020 report cites according to the Star.

The Ksh457 billion accounts for the Kenya’s Gross Domestic Product (GDP) of 4.8 per cent.

The reports comes nine months after another World Bank report – ‘Elite Capture of Foreign Aid: Evidence from Offshore Bank Accounts  – which cited that the Kenyan political class had stashed about Ksh327.89 billion in offshore accounts with low tax for more than two decades.

The report drew a sharp contrast on 22 countries which are heavily reliant on donor aid yet, billions of money from a section of the elites were stashed abroad.

The World Bank report stated that Kenya had Sh136.2 billion deposited in less regulated territories and Sh190.35 billion in regulated bank accounts.

But what is the danger of this? The World Bank noted that while this is not a crime, it creates a leeway for illicit financial flows which deny the taxman, Kenya Revenue Authority an estimated Ksh7 billion every year.

Now, Kenya has been listed among the 30 most secretive countries globally and the second in Africa after Algeria which leads the pack in the continent.

”Although the country’s share of the offshore world is not large, it has increased since 2018 and it is set to increase further as the government positions Nairobi as the latest international financial centre in Africa,” the report added.