Tax experts are raising questions over a proposal in the Finance Bill 2024 seeking to give the Kenya Revenue Authority (KRA) unlimited access to taxpayers’ data, with some nervous that details provided may be used for unintended purposes like surveillance.
- The rationale of the new amendment is to enable KRA to enhance its tax collection where lack of data or its access is deemed to frustrate collection efforts.
- According to PwC’s legal expert Herbert Njoroge, the proposal is to exempt processing of personal data from the requirements under the data protection act if the disclosure is necessary for assessment, enforcement, or collection of any tax or duty under a written tax law.
- The Finance Bill 2024 proposes to amend the data management and reporting system. It states that the Commissioner may establish a data management and reporting system for the submission of electronic documents including detailed transactional data relating to those documents.
“The amendment will give leeway to KRA to access personal data for tax assessment, enforcement and collection of tax where necessary,” he argues on the impact of the proposal. “The access to personal data without court orders and proper procedures on what amounts to necessity is likely to infringe on right to privacy,” he says.
It further states that the Commissioner shall notify in writing the persons required to submit electronic documents through the system established under subsection (1).
The electronic documents include:
- Electronic invoice returns of payments made by a person in the ordinary course of business where goods were exchanged for consideration by a person not employed in the business
- For payments made by a person in the ordinary course of business where services were rendered, or in anticipation of services to be rendered, by a person not employed in the business
- For payments for services rendered, or in anticipation of services to be rendered, in connection with the formation, acquisition, development, or disposal of a business or a part of it, by persons not employed in the business
- For periodical or lump sum payments in respect of a royalty; or for such other commercial or financial transaction as may be designated by the Commissioner.
According to the Bill, the “transactional data” includes the names and addresses of each person to whom a payment was made, and where the payment is for services, the amount of the payment specifying whether the payment is a commission of any kind or is for expenses incurred in connection with rendering the services.
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