Civil Society warns against the enactment of the Nairobi International Financial Centre Bill 2016

Civil Society warns against the enactment of the Nairobi International Financial Centre Bill 2016
  • Enactment of the Bill could give way to money-laundering and financing for terrorism
  • Civil Societies argue that the Bill undermines domestic resource mobilisation

Nairobi risks becoming a tax haven and a conduit for illicit financial flows if the recently-tabled Nairobi International Financial Centre (NIFC) Bill 2016 is enacted into law.

A cross-section of the Kenyan Civil Society has warned that the establishment of the financial centre in Kenya could give way to money-laundering and financing for terrorism owing to the high levels of financial secrecy enshrined in strict laws that forbid any form of disclosure or investigation.

READ  ALSO:Government collected Sh4.7 billion as tax from betting companies

In a review of the Bill titled Nairobi International Financial Centre or Nairobi Tax Haven? Tax Justice Network- Africa (TJN-A) and the East Africa Tax and Governance Network (EATGN) argue that the risk of the NIFC in undermining domestic resource mobilisation capabilities particularly with regards to the incentive structure envisioned is a legitimate concern for Kenya especially in upholding the Addis Ababa Agenda commitment of financing development through domestic resource mobilisation.

“We are concerned about the potential of the NIFC entrenching a culture of providing tax incentives; a vast array of tax breaks and holidays that undermine tax revenue collection efforts by very government supporting the creation of the NIFC while encouraging a ‘race to the bottom’ approach across the region to attract investment. We therefore urge caution and further consultation and analysis to ensure the proposed NIFC does not turn Kenya into a tax haven,” said Jason Rosario Braganza, TJN-A’s Deputy Executive Director

The Bill states that the international financial centre will provide funding for key development projects, employment opportunities particularly for the burgeoning young population and encouraging domestic and foreign investment as well as improving competition in the domestic financial services.

“Budget deficits, increasing debt levels and the recent global economic slump means governments especially in developing countries need to diversify their resource base to fund development projects,” reads a statement by the Civil Societies.

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