The National Treasury has made a fresh attempt to access personal data details without a court's warrant, as part of its wider objective of expanding the tax base by monitoring transactions of businesses by linking with their systems.
In its latest revenue-raising legislation, the Treasury proposes to amend the Tax Procedures Act, 2024 by deleting the provision that prohibits the Kenya Revenue Authority (KRA) from accessing sensitive information when integrating with businesses to give it real-time transactional data. The proposal is contained in the Finance Bill, 2025.
“Section 59A of the Tax Procedures Act is amended in subsection (1B),” reads the Finance Bill, 2025 tabled in the National Assembly.
The amendment comes at a time when the KRA’s attempts to link its systems with banks to have real-time transactional data flopped with lenders arguing their clients’ private data will be exposed.
The Tax Law (Amendment) Act, 2024, which became effective on December 27 last year, amended the Tax Procedure Act, allowing the KRA to integrate its system with those of corporates, with a special focus on banks.
However, the Act excludes data relating to trade secrets and private or personal data held on behalf of customers or collected in the course of business from being shared with the taxman.
The latest effort, which was first contained in the Finance Bill 2024 before quickly being dropped, is likely to trigger a backlash from civil rights activists who were opposed to the proposal for being unconstitutional.
In the proposal, the Treasury had sought an exemption for KRA to access sensitive data details of properties and bank accounts operated by taxpayers without a court warrant in an effort to catch tax cheats.
The Treasury had proposed to amend the Data Protection Act, 2019 to allow the KRA to have unfettered access to sensitive information held by data controllers and processors, including banks, telecoms operators, utilities, schools, land registries, and the National Transport and Safety Authority.
However, the Molo MP Kuria Kimani-chaired Finance Committee rejected the proposal that had sought an additional of around Sh302 billion.
“Additionally, the committee observed that Section 51 of the Data Protection Act outlines the circumstances under which exemptions might apply. Further, Section 60 of the TPA (Tax Procedures Act) empowers the commissioner or an authorized officer with a warrant to have full access to any data for the purposes of administering a tax law.”
Some organisations, including the Law Society of Kenya (LSK) and Amnesty International Kenya, an NGO, had called for the provision to be expunged from the Finance Bill 2024, terming it ‘unconstitutional.’
The Finance Bill 2024 was later dropped following violent youth-led protests that saw the Parliament building.
A year later, the Treasury, headed by John Mbadi, is making another try to bring back the proposal even as it seeks to nab tax cheats.
The government says that the Finance Bill 2025 will seek to increase tax collection mainly through administrative measures meant to close loopholes and enhance efficiency.
