The report of the ‘High Level Panel on Illicit Financial Flows from Africa’ profiled Kenya, Ghana, Mozambique, Tanzania and Uganda. PHOTO | FILE
What you need to know:
Bribery, corruption and abuse of office also make up the list of financial fraud in Kenya.
The report of the ‘High Level Panel on Illicit Financial Flows from Africa’ profiled Kenya, Ghana, Mozambique, Tanzania and Uganda.
Kenya loses an estimated Sh639 billion annually in tax evasion by multinational corporations, significantly hampering economic growth.
A report released by the Tax Justice Network - Africa (TJN-A), an affiliate of the African Union, said available documents and statistics from multinational companies only trace about Sh146 billion lost in trade mis-invoicing between 2002 and 2011.
“The money ends up in tax savings in multinational headquarters and subsidiaries, while data from local firms are manipulated to read losses,” said TJN-A policy and advocacy manager for Africa, Mr Savior Mwambwa, during the launch of the report in Nairobi.
Mr Mwambwa added that many local firms continuously manipulate accounts and shift their profits to subsidiaries. An example is Mauritius where policies allow for low tax rates and tax secrecy.
The report of the ‘High Level Panel on Illicit Financial Flows from Africa’ profiled Kenya, Ghana, Mozambique, Tanzania and Uganda.
Tax evasion forms the major part of financial fraud in the country, followed by commercial transactions and criminal activities (money laundering, and drug, arms and human trafficking).
