The 2025 Finance Bill has ignited intense public and parliamentary debate, particularly surrounding Clause 52, which proposes granting the Kenya Revenue Authority (KRA) the power to access taxpayer personal and financial data without judicial oversight. This controversial provision seeks to repeal Section 59A(1B) of the Tax Procedures Act, removing the legal safeguard that currently prevents KRA from compelling businesses to share private customer data.
Privacy vs. Revenue Collection
The proposal has met widespread opposition, with critics citing potential breaches of privacy, abuse of surveillance, and undermining of due process. Among the dissenters is the National Assembly Finance Committee, led by Molo MP Kuria Kimani, which has recommended the removal of this clause, asserting that it fails to meet constitutional and legal thresholds.
“The provision does not meet the constitutional threshold set under Article 31(c) and (d) of the Constitution of Kenya, which guarantees every individual the right to privacy,” the committee stated. It also referenced Section 51 of the Data Protection Act, which requires specific conditions to justify exemptions to data protection laws.
The committee emphasized that the existing legal framework provides adequate mechanisms for KRA to access relevant taxpayer data through judicial warrants. Such safeguards ensure tax enforcement respects personal privacy and operates within legal and constitutional boundaries.
Stakeholders Voice Concerns
Professional bodies such as the Law Society of Kenya (LSK) and KPMG East Africa have presented strong arguments against the clause. They warned that granting KRA unchecked access could lead to misuse of personal information, erosion of taxpayer rights, and loss of public trust in the tax system.
“This is not just about data access; it’s about protecting the fundamental rights of Kenyans while ensuring KRA enforces taxes fairly,” noted an LSK representative.
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The Treasury’s Defense
Treasury Cabinet Secretary John Mbadi, however, has defended the proposal as a necessary measure to improve tax compliance. During a recent interview, Mbadi remarked, “Voluntary compliance is a challenge. Even well-off individuals often under-declare their income. This move would ensure we collect what is due.”
Furthermore, KRA chairperson Ndiritu Muriithi echoed these sentiments, highlighting that only half of the 20 million Kenyans with KRA PINs file tax returns, with six million filing nil returns. “This discrepancy points to widespread tax evasion. Why not collect taxes at the point of transaction using technology to close these gaps?” Muriithi argued.
Striking a Balance
The debate over Clause 52 encapsulates the broader tension between enhancing revenue collection and safeguarding individual rights. Critics of the clause point to international best practices in data protection, which advocate judicial oversight and public transparency in tax enforcement measures.
By aligning Kenya’s tax policies with these global standards, the government can bolster public trust while still addressing tax evasion. Additionally, tax experts have suggested strengthening the current system by improving digital reporting tools and collaborating with financial institutions, ensuring tax compliance is fair and efficient without infringing on privacy rights.
The Path Forward
Additionally, as Parliament debates the Finance Bill 2025, the fate of Clause 52 remains uncertain. What is clear, however, is that a delicate balance must be struck to safeguard individual rights while enabling KRA to fulfill its mandate. This ongoing dialogue highlights the need for a transparent, accountable, and technologically adaptive tax system that respects taxpayer privacy.
