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"Most flower companies in Kenya don't pay taxes there"

"Kenya is one of the largest flower exporters to Europe. Despite this, most flower companies in Kenya do not pay taxes in Kenya", argues Catherine Ngina Mutava, associate director of Strathmore University’s Tax Research Centre in Nairobi, in a column at Development and Cooperation.

"Foreign owners, who mostly reside in the Netherlands, provide the capital and have found clever ways of shifting profits by charging the Kenyan flower companies all sorts of fees including marketing and management fees. In accounting terms, they are not making money in Kenya. We must not take for granted, moreover, that the flower companies pay taxes in Netherlands. Rich nations’ tax systems have all sorts of loopholes, and their governments are creating tax havens of their own. The Netherlands are known to be a low-tax country.

"The truth is that Kenya needs government revenues to build infrastructure and provide public services, but a large number of companies that are active in an important sector of the economy are probably not being taxed at all. This is not fair, but it is perfectly legal."

Read the full column here.

Publication date: 1/12/2018

 


 

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