Diaspora forex inflows up 51 per cent in five months
Cash sent home by Kenyans in foreign countries for first five months of the year jumped 51.8 per cent compared to a similar period last year, buoyed by record flows in May.
Data from the Central Bank of Kenya shows diaspora remittances surged to $1.112 billion (Sh112.21 billion) in the January-May period from $732.70 million (Sh73.92 billion) in the same period 2017.
The inflows in May hit a new monthly record of $253.73 million (Sh25.60 billion), a 57.11 per cent climb over a year earlier possibly partly helped by a rush to beat the initial June 30 deadline tax amnesty for cash hidden abroad.
Tax consultants at audit firm PKF last month reported a surge in clients seeking to file and return wealth stashed in foreign countries to enjoy the tax pardon.
“In the last two to three months we have seen significant uptake of that amnesty and we think it is at a point where it is even overwhelming for some of us to be able to accomplish the filing and repatriate those incomes,” PKF tax partner Michael Mburugu said on June 4.
“What we have seen is that a lot of money has been repatriated and there are many people waiting to do so. I cannot place a number to it, but generally it is running into billions of shillings.”
Treasury secretary Henry Rotich in the Finance Act 2016 provided for the tax pardon as an incentive to fat cats who have undeclared wealth in foreign accounts to return them and invest back home.
Mr Rotich has since extended the deadline by a year to June 2019, citing low uptake.