President William Ruto's quest to increase tax transparency has received a major boost following the latest review by the Organisation for Economic Co-operation and Development (OECD).
In a statement by the Kenya Revenue Authority (KRA), Kenya received a rating of "Largely Compliant' on the implementation of international standards for tax transparency.
The review, conducted by 171 members of the global body in France, highlighted Kenya's legal framework for eliminating money laundering and tax evasion practices.
All OECD members, including Kenya, are required to undergo a thorough assessment to establish the effectiveness of their legal frameworks in place.
A positive rating shows that the government has adequate laws and practices in line with international standards.
The global monitoring body, however, provided recommendations to KRA for effective compliance. The recommendations are required to be effected by 2026 and a self-assessment report submitted thereafter.
According to the Africa Initiative Progress Report, Africa loses up to Ksh7.9 trillion annually in illegal financial flows.
Kenyans.co.ke samples some of the recommendations stipulated by the global body.
Concern
OECD questioned whether the Central Bank of Kenya conducts an effective verification of information provided by all banks.
Recommendation
CBK to strengthen its ongoing supervision to ensure that accurate and up-to-date information is provided.
Concern
Account holders in banks may not be identified in all cases during the verification process.
Recommendation
Kenya should ensure that all beneficial owners of all accounts need to be identified.
Concern
Lack of a regular oversight programme to monitor compliance with the accounting records.
Recommendation
Implementation of a comprehensive oversight programme to supervise compliance with accounting records.
Concern
A large list of registered companies that are inactive are still in the register.
Recommendation
Kenya ought to ensure the prompt availability of legal information on companies by carrying out adequate oversight and enforcement.
