Kenyan commercial banks have begun to apply the 2023 tax processes legislation known as Common Reporting Standards (CRS).
As the taxman ramps up its attempts to apprehend tax evaders and beneficiaries of illegal money, this rule mandates all Kenyan banks, trusts, and other financial institutions to record and exchange information about overseas account holders with the Kenya Revenue Authority (KRA).
Customers are anxious about their exposure after hearing this announcement.
In response to questions from Citizen TV, the Kenya Bankers Association (KBA) claims that the taxman has asked for information on account stakeholders, address, jurisdiction, domicile, tax identification number (such as the Personal Identification Number or functional equivalent), date of birth, and place of birth.
Additionally, banks will be required to turn over the value of their accounts, including their cash value or surrender value for annuities or cash value insurance contracts, respectively.
Aside from the total gross amount of interest, dividends, and other income related to assets held in the account, they will also be required to submit the amount paid or credited to the account for each calendar year, as well as the total gross proceeds from the sale or redemption of financial assets during that year or any other reporting period in which the financial institution served as a custodian, broker, nominee, or in some other capacity as an agent for the account holder for custodial accounts.
According to the bankers association, all data will be electronically sent in the format required by the taxman and with technology approved or supplied by the commissioner (KRA) to guarantee data security as mandated by regulations.
“Sharing of customer’s data under CRS framework is in accordance with the provisions of Data Protection Act section 25 that provides for principles and obligations of personal data protection as well as Section 48 that provides for conditions to transfer of personal data outside Kenya,” states the association.
In order to assure compliance with the legislation, the bankers’ umbrella organization now states that they will also need to update details of pre-existing accounts. They warn that this could result in a rise in the cost of compliance for banks and other RFIs.
