The Kenya Revenue Authority headquarters at Times Towers in Nairobi. PHOTO | FILE
The
Kenya Revenue Authority has signed an international memorandum of
understanding on tax collaboration with Botswana, to provide
administration assistance from next year.
Tax officials
from Kenya and Botswana on Thursday agreed to the assistance project
that marks the first South-South cooperation pact under the Tax
Inspectors Without Borders programme (TIWB).
In the
plan, experts from KRA will provide technical assistance on audits of
multinational enterprises to their counterparts in the Botswana Unified
Revenue Service (BURS).
The TIWB was launched in July
2015 by the Organisation for Economic Cooperation and Development (OECD)
and the United Nations Development Programme (UNDP).
KRA’s
Commissioner for Domestic Taxes Benson Korongo said the
capacity-building initiative is a key step towards enhancing revenue
mobilisation in Botswana, as many countries in Africa continue to
attract multinational investors.
“Revenue mobilisation
is usually undermined by transfer pricing, which accounts for up to 60
per cent of financial outflows and most developing countries have no
capacity to tackle this complexity. This has made most developing
countries exclusively depend on developed countries for help, hence
increasingly burdening them over time,” said Mr Korongo.
“We
are happy to be the first developing country to extend help as an
alternative to traditional sources of expertise as an inaugural South to
South cooperation.”
The new Kenya-Botswana cooperation
agreement was announced during a seminar on domestic revenue
mobilisation on the side-lines of the 2nd High-Level Global Partnership
for Effective Development Cooperation meeting in Nairobi.
KRA
which has a fully-fledged Transfer Pricing unit will now deploy
qualified tax experts to Botswana to provide assistance with ongoing
audits of multinational companies.
The TIWB programme
focuses on revenue recovery and improving local audit capacity while
strengthening tax compliance in partner states.
“The
challenges of building fair, effective and efficient tax systems that
can deliver the resources needed to meet the UN Sustainable Development
Goals are far bigger than any one organisation,” said OECD
Secretary-General Angel Gurría
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