24 October 2013

Kenya: New Website for Kenyan Whistleblowers to Report Tax Cheats - Report

Nairobi — The Kenyan government plans to create a new website enabling whistleblowers to report tax evasion, smuggling and corrupt tax officials anonymously and will reward them with a share of any revenue it recovers as a result, Business Daily newspaper said on Thursday.

The planned website is part of a government drive to increase the country's tax revenues and close a budget deficit of the equivalent of around $3.8 billion.

"We live in a country where tax evasion is regarded as some sort of heroism, but we know there are truthful people out there who are willing to assist but just need the right platform," Tobias K'onyango, the head of Kenya Revenue Authority's (KRA) integrity programme, was quoted as saying.

Other financial crimes being targeted include unreported income and diversion of taxable goods.

Whistleblowers will be able to log on to the site anonymously and monitor progress on the case online. They will receive three percent of the revenue recovered, up to a maximum of two million Kenya shillings ($23,570), the paper reported.

Last month, KRA said it had discovered that around 10 multinationals had evaded four billion Kenya shillings in taxes through transfer pricing.

Transfer pricing, the prices at which companies trade products, services or assets between their units in different countries, has come under scrutiny following revelations that multinationals including Starbucks and Google have used the practice to declare low profits and cut their tax bills in relatively high-tax countries.

Several multinationals have defended the practice on the ground that it is legal and that their first duty is to maximise returns for their shareholders.

Campaigners have called on the Kenyan government to broaden the tax base and remove tax breaks for multinationals. Activists in other countries have called for international agreements to change tax laws so that companies' tax payments are more closely aligned to their sales in each country.

KRA has invited expressions of interest in implementation of the Anonymous Web-based Intelligence Gathering System by November 6. - Thomson Reuters Foundation

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