This archive report was first published on 16 October 2019.
As the world grapples with the issue of tax avoidance, Kenya is taking a stand against this global problem. In 2015, the Panama Papers revealed how over 200,000 firms worldwide use offshore accounts and shell companies to evade taxes.
According to the Organisation for Economic Cooperation and Development (OECD), Kenya lost up to Sh144 billion in tax revenue during the 2018-2019 financial year due to tax avoidance. However, with the government's anti-corruption campaign in full swing, this number is expected to decrease in the 2019-2020 financial year.
The Kenya Revenue Authority (KRA) is working to change tax laws, ensuring that shell companies without a local presence are addressed comprehensively. Kenya will also participate in the Multilateral Instruments (MLI) treaty, which aims to limit tax avoidance tricks by companies based in participating countries.
Global partnerships are crucial in cracking down on tax avoidance, as it is a truly global problem. The MLI helps to guarantee that abusers of lenient tax laws or legal grey areas are brought to justice and can no longer operate with impunity.
As the national sport of tax avoidance becomes a less attractive option for corporate thieves, the practice will become a thing of the past. The government's efforts to curb tax avoidance are a step in the right direction, ensuring that Kenyan companies contribute their fair share to the country's development initiatives.
