Finance Bill 2025: MPs oppose giving KRA access to personal data

The National Assembly Finance Committee is recommending that Parliament drops the contentious 2025 Finance Bill clause which seeks to give the Kenya Revenue Authority (KRA) powers to access taxpayers' personal and financial data.

Clause 52 of the proposed law proposes to repeal Section 59A(1B) of the Tax Procedures Act, which bars tax bodies like KRA from compelling businesses to share customer personal data.

This would grant KRA unrestricted access to trade secrets and personal data such as mobile money and bank transactions as the authority seeks to nab tax evaders.

The proposal has raised concerns about privacy violations, potential surveillance, and abuse of information.

In its report on the Bill, the Finance Committee chaired by Molo MP Kuria Kimani notes that after deliberation, it concluded that the provision “does not meet the constitutional threshold set under Article 3I(c) and (d) of the Constitution of Kenya, which guarantees every individual the right to privacy.”

“The Committee also referenced Section 51 of the Data Protection Act, which outlines specific conditions under which exemptions to data protection may be permitted,” it says.

The committee further submits that the existing legal framework already provides sufficient authority for the tax authority to access relevant data, provided they obtain a judicial warrant.

“This ensures that tax enforcement powers are exercised within a framework of legal oversight and due process,” the MPs in the committee say.

“Protecting personal privacy and adhering to judicial oversight not only reinforces public trust but also aligns Kenya's approach with international best practices in data protection.”

Several bodies tabled their memoranda opposing the proposal, among them the Law Society of Kenya (LSK) and the audit firm KPMG East Africa.

They argued that granting such powers would significantly undermine taxpayers’ rights to due process and fair adjudication.

But Treasury Cabinet Secretary John Mbadi has repeatedly defended the move as a necessary step to improve tax compliance, citing the challenges of voluntary compliance and the tendency among even well-off individuals to under-declare their incomes.

“If it were up to us, even those earning well like me would not be honest in paying taxes. I will probably return 50-60 percent of what I am supposed to,” Mbadi told Citizen TV last week.

“People love convenience, especially where money is involved. If you just let Kenyans pay taxes at will without being followed up, they will not,” he argued then.

Similarly, KRA chairperson Ndiritu Muriithi has argued that the move would enhance revenue collections and seal tax evasion loopholes.

Muriithi told a panel discussion last week that of the 20 million Kenyans registered for KRA PINs, only about 10 million file their tax returns – and the majority (six million) file nil returns.

“The question is, where are these 16 million Kenyans? Are they truly outside economic activities, and how then can we bring them to participate in financing the state,” he said.

"When you go to a restaurant and pay for the bill will mobile money, it shows how much is VAT and so on. Why is it not possible to have tax payment at that point of transaction; why is it that you have to pay the restaurant first, then (KRA) has to chase the restaurant around next month, in today's technology?”