Kenya urged to abandon tax plans with Singapore
AGREEMENT: The government has been cautioned against signing double taxation agreement (DTA) with Singapore.
In a 10-page memorandum an advocacy group, Tax and Inequality — Kenya, says such a decision could expose the country into future revenue losses if it is to be ratified in its current form.
It called for an exhaustive scrutiny into the impending tax treaty with the Asian Island country to avoid foul play by State officials.
“It is important for Kenya and its citizens to be extra vigilant, do social audit, and have a very thorough examination of the Double Tax Agreement (DTA) between Kenya and Singapore before approving and ratifying this treaty,” said Julius Okoth, the organisation’s spokesperson.
Public comments
National Treasury Cabinet Secretary Ukur Yatani last month issued a general notice requesting public comments on the pending income tax treaties with Barbados and Singapore, which were signed on December 7, 2019 and June 12, 2018, respectively.
In the notice dated July 13, Yatani asked those submitting such comments to do so in writing by August 17, if they are to be considered – with the comments, also known as public participation, hoped to ensure income earned in any of the three countries is not subject to double taxation.
“The Government of Kenya wishes to enter into respective Agreements for the Avoidance of Double Taxation with respect to taxes on income (DTA) with the Government of the Republic of Singapore and the Government of Barbados.
The National Treasury and Planning is spearheading the process on behalf of the Government of Kenya,” he said in the statement.
But that process — of public participation, according to the caucus, is being used as a formality procedure meant to dupe Kenyans while robbing them of a critical decision which has direct impact on their taxes.
Tax and Inequality - Kenya noted that citizen’s participation in Kenya has often been treated and reduced to formalities by duty bearers, as just a process, or an event of massaging the ego of citizenry that their views and recommendations have been heard.
“We hope our views and recommendations on the Double Tax Agreement between Kenya and Singapore will be put into consideration and acted upon,” it says in its August 17, 2020 statement copied to Yatani.
The group further claims that the unclear tax treaty between the two countries could also expose Kenya into what is known as Offshore Indirect Transfer, ordinarily meant to prevent the collection of capital gain tax.
