In a significant win for citizen privacy, a contentious proposal within the Finance Bill 2025/2026 that aimed to grant the Kenya Revenue Authority (KRA) sweeping access to taxpayers' personal and financial data has been dropped. The National Assembly passed the Finance Bill 2025 by acclamation on Thursday, June 19, 2025, clearing its path to presidential assent, but not before removing a clause that had ignited widespread public fear and fierce opposition.
This development marks a crucial moment for Kenya's taxpayers' privacy and highlights the ongoing tension between government revenue collection efforts and the fundamental rights of citizens.
The Contentious Clause: What Was At Stake for Kenyans?
The dropped proposal, specifically Clause 52, sought to repeal Section 59A(1B) of the Tax Procedures Act. This would have given the KRA what many perceived as "unrestricted access" to highly sensitive information, including individuals' mobile money and bank transactions, as well as businesses' trade secrets. The stated aim was to crack down on pervasive tax evasion.
Treasury Cabinet Secretary John Mbadi had been a vocal defender of the measure, arguing it was a necessary step to improve tax compliance. Speaking to Citizen TV recently, Mbadi expressed a pragmatic, if somewhat cynical, view on voluntary compliance: "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 per cent of what I am supposed to. People love convenience, especially where money is involved. If you just let Kenyans pay taxes at will without being followed up, they will not.”
Echoing this sentiment, KRA Chairperson Ndiritu Muriithi had also advocated for the enhanced powers, stating they would significantly boost revenue collections and seal crucial tax evasion loopholes. Muriithi highlighted the stark reality that out of 20 million Kenyans registered for KRA PINs, only about 10 million actually file their tax returns. Of those, a staggering six million file 'nil' returns, raising questions about a vast segment of the economy operating outside the tax net. "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?" Muriithi questioned, emphasizing the need for robust mechanisms to bring more citizens into the tax bracket.
A Win for Privacy: Parliament's Firm Stance
Despite the fervent defense by the Treasury and KRA, the proposal faced a strong backlash from Members of Parliament and civil society alike. The National Assembly's Finance Committee, chaired by Molo MP Kuria Kimani, played a pivotal role in reviewing and ultimately rejecting the contentious clause.
In its report on the Bill, the Committee meticulously outlined its reasons for the rejection. It concluded that the provision granting KRA such broad access to personal data "does not meet the constitutional threshold set under Article 31(c) and (d) of the Constitution of Kenya." This critical constitutional article guarantees every individual the right to privacy, specifically protecting against information relating to their family or private affairs being unnecessarily required or revealed, and safeguarding the privacy of their communications.
Furthermore, the Committee referenced Section 51 of the Data Protection Act, which clearly outlines specific and limited conditions under which exemptions to data protection may be permitted. The MPs in the committee asserted that the existing legal framework already provides sufficient authority for the tax authority to access relevant data, provided they obtain a judicial warrant. This crucial requirement, they argued, "ensures that tax enforcement powers are exercised within a framework of legal oversight and due process." The rejection reinforces the principle that even in the pursuit of national revenue, constitutional rights must remain paramount.
The Broader Narrative: Public Protests vs. Legislative Process
The journey of the Finance Bill 2025/2026 has been marked by significant public engagement, most notably the widespread protests that erupted last year in response to earlier iterations of tax proposals. Kenyans took to the streets, braving police brutality, to voice their deep-seated fears and objections to what they perceived as an overreach by the government and an undue burden on an already struggling populace.
It's a stark contrast: as citizens were immersed in street protests, fighting for human rights and against perceived injustices, the legislative machinery continued to churn, ultimately passing a bill that, for many, still carries the weight of economic anxiety. The dropping of the KRA data access clause offers a rare glimpse of public pressure influencing legislative outcomes, a confidence booster for those who believe in active citizenry.
However, the question lingers: was the intense focus on police brutality and street activism a distraction, diverting public attention and energy away from crucial economic decisions being made in Parliament? The timing of such events often raises uncomfortable questions about strategic diversions. While one battle for privacy seems to have been won, the broader war for economic justice and transparency, particularly for ordinary Kenyans, continues.
What's Next for Kenya's Economy and Taxpayers?
With the Finance Bill 2025 now passed by the National Assembly, it proceeds to the President for assent to become law. While the immediate threat of widespread KRA data access has receded, the government's need to enhance revenue collection remains. The KRA continues to grapple with the challenge of bringing more Kenyans into the tax net and improving compliance.
The removal of the controversial data clause underscores the critical balance that must be struck between state powers, national economic goals, and the fundamental rights of its citizens. As Kenya moves forward, continued vigilance from the public and adherence to legal oversight will be crucial in ensuring that tax enforcement measures uphold constitutional guarantees and foster trust, rather than fear, among the populace. God help Kenya as we navigate these complex economic and social landscapes.
