Kenya’s super-rich are hiding more than Sh15 trillion in offshore tax havens across the world, a newly published report says.
The individuals who form the cartels of Kenya’s wealthiest, mostly use the offshore accounts to hide their ill-gotten trillions, evade taxes and steer clear of Kenyan laws, the report by American think tank National Bureau of Economic Research (NBER) says.
On Tuesday, a chart showing wealth placed in tax havens by households and its equivalent in national GDP surfaced on social media, ranking Kenya second globally.
The info data purportedly published by AFP and picked by several local news portals shows Kenyan households have stashed $147.7 billion (Sh14.7 trillion) in offshore accounts, double Kenya’s GDP, which was quoted at $70.8 billion (Sh7.08 trillion) by teh World Bank in 2016.
Even so, the data doing rounds on Twitter indicates Sh14.7 trillion is 68 per cent of Kenya’s GDP, and is second to United Arab Emirates, which has $I88.7 billion (Sh18.9 trillion) or 70 per cent of the country’s GDP.
“Among the countries that created a lot of shell companies (relative to the size of their economy), one finds Jordan, Russia, Taiwan, the UAE, Venezuela, Zimbabwe and Kenya,” the report says, adding the list is made of countries with high offshore wealth to GDP ratios.
The NBER report indicates that Kenyans holding undisclosed funds in foreign banks have not made use of a State tax amnesty to declare the money and repatriate it to remain eligible.
In 2016, a vast leak of 11,500 confidential documents from a Panama-based legal firm, Mossack Fonseca, gave a rare glimpse into how some of the wealthiest people in Kenya use offshore financial bolt holes to conceal billions of dollars’ worth of assets.
The papers named 191 individuals and 25 offshore companies as having links with Kenya.
The individuals mostly used shell companies to execute their illicit schemes. The companies were mostly created to give the appearance of being a legitimate business while the sole purpose is, in fact, to stash away assets while keeping the real owner’s identity hidden.
Recent reports have indicated that the amount of money that rich Kenyans have kept in Swiss banks increased 4.3 per cent to Swiss francs 950 million (CHF) or about Sh96 billion in 2017 from Swiss francs 911.4 million or about Sh92.1 billion in 2016. Source : Business Daily
You can download the full report here
On July 9th 2018, President Uhuru Kenyatta and his Swiss counterpart Alain Berset signed an agreement aimed at helping Kenya recover illegally acquired assets that were stashed in Swiss banks during the Swiss president’s two-day visit to Kenya.
The agreement, known as the Framework for the Return of Assets from Corruption and Crime in Kenya, or FRACCK, created a mechanism for Kenya to recover money swindled from state coffers by corrupt individuals and hidden in Switzerland.