Auditors seek tax amnesty for cases already in court

Auditors and accountants want the tax amnesty recently announced by National Treasury extended to cases that are in court and those under investigation.

Some also expressed concern that there is no clarity on the issue of possible prosecution after the disclosure of material facts on tax evasion or whether confidentiality applies to other crimes that may have been committed in the process.

In the past cash stashed abroad from tax evasion has been associated with money laundering or financing of terrorism as well as corruption.

" Institute of Certified Public Accountants of Kenya proposed that a provision should be introduced in the amnesty for people with ending litigation or matters pending before court given the tax cases at the tribunal," reads the report by the parliamentary committee on Finance and Planning. The MPs did not express an opinion on the matter.

Audit and advisory firm Deloitte Consulting said the amnesty would be more effective if it included those who have been notified of a tax audit or investigation as long as the process has not commenced.

"The amnesty is a welcome move. However, to increase its effectiveness, the following should be addressed: The tax amnesty should not exclude persons who have been notified of a tax audit/ investigation from the programme. As long as the audit has not commenced, the taxpayer should be allowed to apply for the amnesty," said Deloitte.

"Taxpayers are advised to review their tax affairs to take early advantage of the amnesty, as the revenue authority will likely increase the intensity of audits to make up for revenue shortfalls expected to arise due to the adverse economic effect of Covid-19."

Legal advisers Bowmans Kenya noted that the amnesty is different from the previous one that focused on foreign cash without necessarily having to pay tax. The current one is keen on raising tax money.

"One key difference between this and the previous amnesty is that the last amnesty provided for repatriation of funds from external sources after which such monies would not be subject to taxation by the government," said Bowmans Kenya.