On 15th March 2019, High Court Judge Weldon Korir declared the Double Tax Avoidance Agreement (DTAA) between Kenya and Mauritius unconstitutional, stating in his ruling that the Kenyan government had failed to follow constitutional requirements for the ratification of the agreement.
A DTAA is a treaty signed by two or more countries to help taxpayers avoid double taxation on income.
Under the DTAA, signed 7 years ago, companies registered in both countries would, for instance, only be subjected to a withholding tax rate of 10%, which is what Mauritius charges, instead of 15% as levied in Kenya. Activists argue that this represents a revenue loss for the country.
Even though it is acknowledged that tax avoidance is not legally wrong, the ethics around it are debatable as argued by Alvin Mosioma, the Executive Director of Tax Justice Network Africa, the non-governmental organization that successfully challenged the DTAA in court. Africa Uncensored’s John-Allan Namu sat down with him to get his expert view on the matter.
This conversation is done in partnership with The Elephant.