2.4 Revenue Transparency [Page 9]  

Tax revenue is the most important, reliable and sustainable means of resourcing initiatives that contribute to the realisation of human rights such as health and education. Businesses are significant contributors to tax revenue. The Kenya Revenue Authority Act, 1995 provides that domestic revenue is derived from several sources including taxes, duties, fees, levies, charges, penalties, fines or other monies and are collected from individuals, private and public businesses by different entities at national and county level.

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), corruption (target 16.5), Goal 17 on strengthening implementation and partnerships, target 17.1, provides for the strengthening of domestic resource mobilisation, including through international support to developing countries, to improve domestic capacity for tax and other revenue collection.

Like in many jurisdictions, Kenya faces challenges concerning revenue mobilisation and the link to business activities, among them IFFs, tax avoidance and tax evasion by businesses. These practices result in reduction of the resources available for investment in essential social services fostering inequalities, undermining economic and social institutions and discouraging transparency in matters of public finances. The Kenya Government has enacted legislation to address these practices, including the Anti-Corruption and Economic Crimes Act, the Bribery Act, 2016, and amendments in 2017 to the Proceeds of Crime and Anti-Money Laundering Act, 2009 (POCAMLA).

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:

  1.  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.
  2. Lack of disclosure of contracts particularly those that have significant economic and social consequences.
  3. Lack of transparency in administration and management of revenues from the exploitation of natural resources including from mining and oil and gas activities.
  4. 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’.



3.1. Pillar 1: The State Duty to Protect

Policy Actions [Page 18]

The Government will:

xii.     Review current trade and investment promotion agreements and bring them into compliance with the Constitution and international human rights standards to ensure that they are not used to facilitate illicit financial flows and tax evasion by businesses.




Strategic Objective Policy Actions Key Actors
Strategic Objective 1:

Enhance existing policy, legal, regulatory and administrative framework for ensuring respect of human rights by business through legal review and development of specific guidance for business


Review current trade and investment promotion agreements and bring them in consonance with the Constitution and the state’s international human rights obligations. Ministry of Trade and Industry, KRA, Financial Reporting Centre (FRC)