2020-02-26

AMSTERDAM, NAIROBI - Dutch flower growers in Kenya avoid corporate taxation, using transfer pricing and offshore constructions. The loss of tax revenue due to these practices is substantial and has large consequences for Kenyan society.

Dutch flower growers in Kenya avoid corporate taxation (on income, dividends and capital gains), using transfer pricing between the Kenyan subsidiary and a parent company in (mostly) the Netherlands and offshore constructions in i.a. The Bahamas, the British Virgin Islands and Jersey.

These practices result from expectations of shareholders, an intense competition on the market (margins are very small), an aversion to the amount of tax that is to be paid in Kenya (30%), and a lack of trust in the Kenyan Revenue Authority and the government.

The loss of tax revenue due to these practices is substantial and has large consequences for the Kenyan society and its inhabitants, such as the increase of “easy to collect” taxes and the lack of investments in public goods. These consequences keep Kenya's inhabitants poor and restrain easy/open access to healthcare and education.

Linda van der Pol

Linda van der Pol is a cultural historian and a freelance journalist based in The Netherlands.

Linda van der Pol

Romy van der Burgh

Romy van der Burgh is a freelance journalist with a background in (political) philosophy. She is based in the Netherlands.

Romy van der Burgh
Supported
€7,296 allocated on 15/01/2020
ID
MT/2019/113

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