The planned integration of the Kenya Revenue Authority (KRA) systems with those of telecommunications firms will no doubt improve tax collections significantly.
Being able to monitor real-time transactions on mobile merchant accounts such as Safaricom’s Lipa Na M-Pesa will aid the taxman’s efforts to catch tax cheats and enforce compliance.
A similar integration with 36 betting firms last year is credited with massive increases in taxes collected from the industry in the financial year ended June.
Excise duty charged on betting, for instance, increased 116.2 percent to Sh6.64 billion while withholding tax from winnings jumped 21.1 percent to Sh8.6 billion.
But even as the KRA looks to replicate that success on the telcos’ platforms, it must be prepared to address the legitimate concerns about possible abuse and privacy breaches its surveillance of traders’ transactions will raise.
Telcos and civil society organisations have in the past taken issue with any policy decisions that have the potential of compromising personal data.
They notably waged a protracted legal battle against the move by the Communications Authority of Kenya (CA) to instal a mobile phone spying gadget called device management system (DMS) to reportedly curb fraud.
Although the matter was, legally speaking, settled when the Supreme Court gave the CA the greenlight to instal the device, concerns about communications surveillance by State agencies continue to grow, especially against the backdrop of the new data protection law.
To allay Kenyans’ fears about the KRA’s platform integration with telcos, the taxman should engage the telcos and civil society on the modalities to implement it while avoiding privacy violations.
