NAIROBI, Feb 18 (NNN-KBC) — Kenya has joined the league of 93 nations which are united in addressing economic vices by signing the Multilateral Convention on Mutual Administrative Assistance in Tax Matters.
The signing of the crucial agreement by Kenya’s Ambassador to France, Salma Ahmed, in the presence of Organization for Economic Co-Operation and Development (OECD) Deputy Secretary-General Douglas Frantz, makes Kenya the 94th jurisdiction to join the multilateral instrument against offshore tax evasion and avoidance.
Addressing the Steering Group meeting of the Global Forum on Transparency and Exchange of Information for Tax Purposes in Paris, the Kenya Revenue Authority (KRA) Commissioner-General, John Njiraini, confirmed that Kenya was looking forward to the speedy ratification of the agreement.
The country, he said, had already made tremendous progress in strengthening local capacity for addressing international tax avoidance. Such progress included the KRA’s recent establishment of a formal structure to address International Tax Avoidance and to support Tax Information Exchange with other signatories of the Multilateral Convention on Mutual Administrative Assistance in Tax Matters.
Further, Njiraini noted that the recent enactment of the Tax Procedures Bill into law, dmonstrated the seriousness with which Kenya was taking international tax avoidance. The new Tax Procedures Act imposes stiff penalties for engagement in international tax avoidance schemes with the penalty which can be imposed as high as double the tax avoided.
The Multilateral Convention on Mutual Administrative Assistance in Tax Matters was developed jointly by the OECD and the Council of Europe in 1988 and amended in 2010 to respond to the call by the Group of 20 (G20) leading developed and emerging countries to align it to the international standard on exchange of information and to open it to all countries, thus ensuring that developing countries could benefit from the new more transparent environment.
Since then, the Convention has become a global instrument and is seen as the ideal instrument for swift implementation of the new Standard for Automatic Exchange of Financial Account Information in Tax Matters developed by the OECD and G20 countries as well as automatic exchange of country by country reports under the OECD/G20 Base Erosion and Profit Shifting (BEPS) Project.
It is also a powerful tool for the fight against illicit financial flows.