The State has handed the unclaimed assets agency more powers including property seizure of non-compliant companies in fresh efforts to collect an estimated Sh241 billion held by public and private entities.
The State has amended the law to empower the Unclaimed Financial Assets Authority (Ufaa) to move to court and obtain orders to recover in full, interest and penalties accrued on unsurrendered assets.
Idle assets are under the law supposed to be declared and surrendered to the Ufaa on or before November 1 every year. Holders file nil returns if applicable.
The State has amended section 33 of the Unclaimed Financial Assets Act, 2011, which slaps a fine of between Sh7,000 to Sh50,000 for each day a report on idle assets is withheld or the duty is not performed.
Holders also pay a fine of 25 percent of the value of the asset when they fail to surrender it to the authority.
“The penalties payable under subsections (1), (4) and (5) of this section shall — (a) be recoverable as civil debts summarily and (b) in total, not exceed the value of the assets found to be reportable and deliverable,” the Finance Act, 2022, which took effect last Friday states.
Unclaimed assets include money in bank accounts that have been dormant for more than five years, bankers’ cheques not cashed and contents in safe deposit boxes unclaimed for more than two years.
The unclaimed assets hit Sh54.8 billion, turning the agency into another financial black hole that is aggressively collecting billions of shillings every year but failing to find its owners.
Kenyans remain disinterested in pursuing funds legally belonging to them or their families despite the tough economic conditions made worse by the soaring cost of living.
Ufaa revealed in January that it only received 2,315 claims between October and December last year worth Sh270 million.
The value of the idle assets grew from Sh50.9 billion in June 2021 to Sh54.8 billion in December.
The money is largely held by insurance companies, banks, pension schemes, law firms, utility companies, mobile phone money wallets and Saccos, among others.
The majority of the funds are held in stocks of a billion shares worth Sh30 billion and 9.8 million unit trust portfolios worth Sh55 million.
The Authority in January revealed it is also holding Sh23.1 billion in cash and Sh120 million in foreign currency which it can invest in government securities, meaning the government is the biggest beneficiary of the idle money.
Surrendered safe boxes that are believed to contain jewellery, title deeds, share certificates and Treasury bills rose to 2,949 units from 2,873 in June.
A baseline survey commissioned in 2018 estimated that approximately 477,112 public and private entities hold these assets in their books.
The State has now changed the law to empower the Cabinet Secretary to waive penalties and interest for those wishing to surrender idle cash.
Section 33 of the Act establishes a Voluntary Unclaimed Financial Assets Disclosure Programme.
This will grant relief of the penalties and interest in unclaimed assets where the holder discloses, reports or delivers the assets to the authority.
“A holder of unclaimed assets may disclose, report and deliver the assets to the Authority for the purpose of being granted relief on penalties and interest on such assets,” the Finance Act states.
“This section shall apply to assets held up to the thirtieth day of June 2022.”
The Treasury says that the punitive fines have discouraged holders of idle assets from declaring and surrendering the idle assets.
The value of the idle assets grew from Sh50.9 billion in June 2021 to Sh54.8 billion in December.
The money is largely held by insurance companies, banks, pension schemes, law firms, utility companies, mobile phone money wallets and Saccos, among others.
The majority of the funds is held in stocks of a billion shares worth Sh30 billion and 9.8 million unit trust portfolios worth Sh55 million.
The Authority in January revealed it is also holding Sh23.1 billion in cash and Sh120 million in foreign currency which it can invest in government securities, meaning the government is the biggest beneficiary of the idle money.
Surrendered safe boxes that are believed to contain jewellery, title deeds, share certificates and Treasury bills rose to 2,949 units from 2,873 in June.
A baseline survey commissioned in 2018 estimated that approximately 477,112 public and private entities hold these assets in their books.
The State has now changed the law to empower the Cabinet Secretary to waive penalties and interest for those wishing to surrender idle cash.
Section 33 of the Act establishes a Voluntary Unclaimed Financial Assets Disclosure Programme.
This will grant relief of the penalties and interest in unclaimed assets where the holder discloses, reports or delivers the assets to the authority.
“A holder of unclaimed assets may disclose, report and deliver the assets to the Authority for the purpose of being granted relief on penalties and interest on such assets,” the Finance Act states.
“This section shall apply to assets held up to the thirtieth day of June 2022.”
The Treasury says that the punitive fines have discouraged holders of idle assets from declaring and surrendering the idle assets.
