A new study shows trade misinvoicing leads to significant revenue losses for Kenya.
The report entitled Kenya: Potential Revenue Losses Associated with Trade Misinvoicing also concludes that misinvoicing of imports and exports approaches the value of one quarter of all trade transactions
Analysis of trade misinvoicing in Kenya in 2013 shows that the potential loss of revenue to the government was US$907 million for the year, according to a new study by illicit fund flow analysts and lobby group, Global Financial Integrity (GFI).
It says this represents 8 per cent of total annual government revenue as reported to the International Monetary Fund (IMF). The report estimates the value gap of all imports and exports represents approximately 23 per cent of the country’s total trade.
The report analyses Kenya’s bilateral trade statistics for 2013 (the most recent year for which sufficient data are available), which are published by the United Nations (Comtrade).
The detailed breakdown of bilateral Kenyan trade flows in Comtrade allowed for the computation of trade value gaps that are the basis for trade misinvoicing estimates.
Import gaps represent the difference between the value of goods Kenya reports having imported from its partner countries and the corresponding export reports by Kenya’s trade partners.
Export gaps represent the difference in value between what Kenya reports as having exported and what its partners report as imported.
Further details, including a link to download the report Kenya: Potential Revenue Losses Associated with Trade Misinvoicing can be found here.
Categories: Trade Based Financial crimes News