The National Assembly’s Finance Committee has recommended the deletion of a controversial clause in the 2025 Finance Bill that would grant the Kenya Revenue Authority (KRA) sweeping powers to access personal and financial data of taxpayers.
Clause 52 of the Bill proposes to repeal Section 59A(1B) of the Tax Procedures Act, which currently prohibits the KRA from compelling businesses to share customers’ personal information. If enacted, the amendment would give the tax agency unfettered access to trade secrets and sensitive data, including mobile money and bank transactions, in a bid to curb tax evasion.
The proposal sparked widespread concerns from privacy advocates, legal experts, and auditors, who warned it could lead to surveillance, data misuse, and breaches of constitutional rights.
In its report on the Bill, the Finance Committee chaired by Molo MP Kuria Kimani ruled that the clause does not meet the constitutional threshold under Article 31(c) and (d), which guarantees every individual the right to privacy.
“The committee also cited Section 51 of the Data Protection Act, which outlines strict conditions under which exemptions to privacy laws may apply,” the report reads in part.
According to the MPs, the current legal framework already allows the KRA to access financial data—provided it obtains a court-issued warrant. This, they said, ensures due process and maintains legal oversight.
“Protecting personal privacy and adhering to judicial processes not only promotes public confidence but also aligns Kenya with global standards on data protection,” the report noted.
Opposition to the clause was also voiced by professional bodies including the Law Society of Kenya (LSK) and audit firm KPMG East Africa, which submitted memoranda warning the provision would infringe on taxpayer rights and compromise legal safeguards.
Despite the backlash, Treasury Cabinet Secretary John Mbadi has defended the proposal, arguing it is essential for enhancing tax compliance. He cited the challenge of voluntary tax reporting, even among high-income earners.
“If it were up to us, even those of us earning well would not be honest with taxes,” Mbadi said during a Citizen TV interview. “I might only remit fifty or sixty percent of what I owe. People love convenience, especially when money is involved.”
KRA Board Chairperson Ndiritu Muriithi echoed this sentiment, pointing out that of the twenty million Kenyans with KRA PINs, only about ten million file returns, and six million of those are nil returns.
“The question is—where are the other sixteen million? Are they really not engaged in economic activity? And how can we bring them into the tax net to help finance government functions?” Muriithi asked during a panel discussion last week.
He further argued that technology could simplify revenue collection at the point of transaction.
“When you pay a restaurant bill using mobile money, it shows the VAT breakdown. So why can’t tax be collected right then and there instead of chasing the restaurant next month?” he posed.
