Lawmakers will block a proposal in the Finance Bill 2025 that would have granted the Kenya Revenue Authority (KRA) sweeping access to taxpayers’ proprietary systems and sensitive business data.
- •In its report, the National Assembly’s Finance Committee recommends dropping Clause 52, which seeks to repeal Section 59A(1B) of the Tax Procedures Act — a safeguard that currently limits KRA’s access to trade secrets and personal data during digital system integrations.
- •The contested provision was designed to protect businesses from having to surrender commercially sensitive information when linking their platforms with KRA’s digital infrastructure.
- •Its repeal would have opened the door for the tax authority to demand direct access to internal databases and customer records under the guise of enforcing compliance, a move widely seen as disproportionate to its intended goal.
“The committee noted that the existing legal framework already provides sufficient authority for the commissioner or an authorized officer to access relevant data, provided they obtain a judicial warrant,” the report stated.
The provision was seen as an overreach by the tax authority, which would inevitably violate data privacy laws. KRA argued that direct access to confidential financial data would enable it to nab tax cheats, identify undeclared assets, and seal revenue leakages more efficiently.
The Finance Bill 2025 also sought to strike out a proposed amendment to Section 42 of the Tax Procedures Act, which would have allowed KRA to issue agency notices — freezing and seizing taxpayer funds — even when an appeal is still pending before the courts or the Tax Appeals Tribunal.
The House committee recommended the rejection of the contentious proposal, which would have been criticized for being unfair to litigants challenging tax assessments. Due to the complexity of taxation laws and the rapacity of KRA’s collection procedures, cases challenging tax assessments have spiked.
Both proposals would have significantly expanded the state’s powers to collect revenue without judicial resolution. In the face of fiscal desperation, such powers could erode taxpayer protection and complicate revenue collection.
The Treasury is banking on administrative reforms, as opposed to new taxes, to raise an extra KSh 30 billion in the 2025/26 fiscal year, seeking to avoid a repeat of last year’s public unrest. With revenue targets pegged at KSh 3.32 trillion, the government aims to boost compliance by modifying tax laws and collection procedures rather than broadening the tax net.
Meanwhile, KRA is under immense pressure to hit revenue targets in a shrinking and an increasingly volatile economic environment. The next financial year’s budget stands at KSh 4.24 Trillion.
