The National Assembly Finance Committee has recommended the removal of a controversial clause in the Finance Bill 2025 that would have granted the Kenya Revenue Authority (KRA) sweeping access to taxpayers’ personal and financial data.
Clause 52 of the proposed Bill sought to repeal Section 59A(1B) of the Tax Procedures Act, which currently prevents KRA and other tax bodies from compelling businesses to share sensitive customer data, including bank and mobile money transactions. The proposal triggered a wave of opposition from civil society, professional bodies, and data protection advocates over fears of privacy violations and potential surveillance.
In its official report, the committee, chaired by Molo MP Kuria Kimani, concluded that the clause failed to meet constitutional standards, particularly Article 31(c) and (d) of the Kenyan Constitution, which guarantees every individual the right to privacy.
“The provision does not meet the constitutional threshold… and contradicts Section 51 of the Data Protection Act, which provides clear guidelines for exemptions to data protection,” the report states.
The committee also argued that the existing legal framework already permits the tax authority to access relevant data, provided it obtains a judicial warrant. This, the MPs said, ensures tax enforcement is carried out within the bounds of legal oversight and due process.
“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,” the committee noted.
Prominent organizations such as the Law Society of Kenya (LSK) and audit firm KPMG East Africa submitted memoranda opposing the clause, warning it would erode due process and fundamental rights.
Despite the pushback, Treasury Cabinet Secretary John Mbadi has repeatedly defended the proposal as essential for enhancing tax compliance. Speaking on Citizen TV last week, Mbadi acknowledged that even high-income earners often under-declare their incomes, making strict enforcement necessary.
KRA Board Chair Ndiritu Muriithi also backed the clause, arguing it would help close gaping tax evasion loopholes. “Of the 20 million Kenyans with KRA PINs, only 10 million file returns, and most of them file nil returns. We must find a way to bring more people into the tax net,” he said.
With the committee’s recommendation, the fate of Clause 52 now rests with Parliament, which is expected to debate and vote on the Finance Bill in the coming weeks. The decision could mark a pivotal moment for data privacy and tax policy in Kenya.
Written By Rodney Mbua
