CHAPTER TWO: SITUATIONAL ANALYSIS AND THEMATIC AREAS OF FOCUS
2.4 Revenue Transparency [Page 9-10]
Tax justice and the regulation of financial behaviour of companies can no longer be treated in isolation from the corporate responsibility to respect human rights, outlined in the UNGPs and business commitments to support the SDGs. Indeed, the SDGs include specific targets on reducing illicit financial flows (IFFs), returning stolen assets, reduction of corruption, and strengthening domestic resource mobilisation. In this respect, Goal 16 on the promotion of peaceful and inclusive societies includes specific targets on reducing illicit financial flows (target 16.4) [and] corruption (target 16.5). […]
The 2017 amendments to the Proceeds of Crime and Anti-Money Laundering Act, 2009 establish the Financial Reporting Centre (FRC), an independent financial intelligence agency charged with combating money laundering and identifying proceeds of crime including tax evasion. The Ethics and Anti-Corruption Commission Act, 2012 creates the Ethics and Anti-Corruption Commission (EACC) whose mandate is to combat and prevent corruption and economic crimes set out in the Anti-Corruption and Economic Crimes Act. The Bribery Act, 2016 seeks to address the supply side of corruption by placing a duty on businesses to put in place appropriate measures relative to their size, scale and nature of operations towards the prevention of bribery and corruption, and also requires any person holding a position of authority in a business to report any knowledge or suspicion of bribery within twenty-four hours. Kenya is also party to international and regional initiatives on combating bribery and corruption.
Despite the above efforts, the NAP consultations identified several challenges that affect revenue transparency:
- Corruption in the process of revenue collection and the management of public revenue. Stakeholders identified corruption in the business licensing process, the process of tax collection and public procurement attributed to both public and private sector actors.
- Lack of disclosure of contracts particularly those that have significant economic and social consequences.
- Lack of transparency in administration and management of revenues from the exploitation of natural resources including from mining and oil and gas activities.
- The absence of legal beneficial ownership disclosure aids the veil of secrecy in determining who owns and controls business entities inhibiting law enforcement’s ability to ‘follow the money’.