Tax Justice Network Africa (TJNA) and Katiba Institute have filed a constitutional petition at the human rights division of Kenya’s high court over tax treaties.
Development Diaries gathered that the petition was filed after a series of exposés, investigations, and leaks showed how African countries keep losing tax revenue through tax treaties.
The petition concerns ten double taxation agreements signed by Kenya, Iran, Kuwait, Seychelles, South Africa, Qatar, Korea, the United Arab Emirates, India, the Netherlands, and Mauritius.
Civil society organisations in the country allege that the tax agreements are used by multinational enterprises to avoid paying tax and hence eroding revenues of governments and hindering development in Kenya.
The organisations want the government to reflect on its tax measures and also seek a remedy for the current policy of double taxation.
‘Questions surrounding tax treaties need to be urgently addressed in a decisive manner’, TJNA said in a statement.
‘This is especially the case if one is to consider the recent revelations concerning how Kenyan companies abuse them to avoid paying taxes in the country’.
‘This is necessary, especially because treaties entail a restriction on tax sovereignty and have major revenue implications – they grant tax benefits and exemptions to foreign investors not available to Kenyan citizens or companies, resulting in a reduction of government revenue’, TJNA’s Alvin Mosioma said.
He also said that the government would need to start initiating tax treaties in a transparent manner according to the tenets of the Kenyan constitution.
Photo source: Ting Chen