The state is proposing an amendment to the Data law so that the Kenya Revenue Authority (KRA) would receive the power to access Kenyans’ financial data.
The National Treasury is proposing tax reforms which will allow the taxman to access Kenyans’ data without limitations. This data includes the real-time mobile money financial transactions one carries out daily.
The ministry’s draft medium-term debt strategy included a proposal to exempt KRA from the data protection regulations. This proposal would see the KRA having full access to transactions Kenyans make without the citizen’s awareness.
The Data Protection Act 2019 requires that data be collected only after a valid explanation has been offered. This explanation is necessary whenever information relating to family or private affairs is required. Even after explaining, the data controller or processor has to get the personal data directly from the data subject.
The government is therefore proposing that the law be amended to exempt KRA from the Data Protection Act 2019 provisions. This exemption will allow ease of access by the agency to information. According to KRA, this information is necessary to maximise enforcement of revenue collection.
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Integrating KRA with other systems
The National Treasury proposed integrating at least three systems: the Integrated Population Registry, the telecommunications companies and banks, and the betting and gaming systems.
Integration with the integrated population registry will allow the KRA access to death and birth records. This access will enable them to deal with people who commit tax fraud through fake deaths.
With the telecommunication companies and banks, KRA will see real-time money transactions. These transactions include money movement in individual and company accounts from the back end.
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Access to this integration will allow them to track Mpesa and Airtel Money transfers. This move ensures they can net Kenyans’ earnings from the digital platforms.
Furthermore, they will see money sent to the individual mobile money wallets. They will ensure, therefore, that swift tax collection exists at source.
Integration with the betting and gaming systems is a move to accelerate tax collection within the gambling industry. This is to make sure that there is real-time remittance of the gaming and betting taxes.
“This will allow seamless access to information for a complete view of taxpayers’ economic transactions through big data analytics to drive compliance,” the draft debt strategy paper read.
Kenyans however, are conflicted about KRA gaining such access to information they consider private. Some state that the transactions made might not refer directly to the income one receives, but is rather the mediator of money transactions being made.
The Taxman, however, is in search of ways to arrest tax fraudsters and furthermore, tax evaders. This is one of the ways the agency will ensure enforcement of tax collection.
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