Despite previous opposition, Kenya is once again attempting to grant the Kenya Revenue Authority (KRA) access to private financial data. The 2025 Finance Bill proposes deleting Section 59A(1B) of the Tax Procedures Act, a provision introduced in December 2024 that prohibits KRA from compelling businesses to share trade secrets or personal data collected from their customers.
The targeted clause states:
“The Commissioner shall not require a person to integrate or share data relating to trade secrets; and private or personal data held on behalf of customers or collected in the course of business.”
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Removing this clause would allow KRA to demand access to sensitive financial information, such as mobile money and bank transactions, bypassing existing privacy protections. This move signals a renewed effort by the state to use data access as a compliance tool, reigniting debates over the limits of state power and privacy rights.
A similar proposal appeared in the 2024 Finance Bill, where the Treasury sought to amend the Data Protection Act, 2019, to give KRA unfettered access to information held by data controllers and processors, including banks, telecom firms, utilities, schools, land registries, and the National Transport and Safety Authority (NTSA), without a court warrant. The amendment aimed to improve tax enforcement and raise an additional KES 302 billion ($2.3 billion).
However, the National Assembly Finance Committee rejected the proposal, citing that it might not meet the constitutional threshold under Articles 31(c) and (d) of the Constitution of Kenya, which safeguard the privacy of individuals . Civil society groups, including the Law Society of Kenya and Amnesty International Kenya, also deemed the proposal unconstitutional, leading to its withdrawal after nationwide protests.
Under Treasury Cabinet Secretary, John Mbadi, the government is now attempting to regain access to sensitive information by quietly removing the privacy clause from the Tax Procedures Act, instead of amending the Data Protection Act. This approach aims to achieve the same outcome through a narrower legislative route.
The government asserts that the 2025 Finance Bill focuses on closing tax loopholes and expanding the tax base through administrative reforms. However, removing Section 59A(1B) would significantly alter how KRA can access financial systems.
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Implications for the Crypto Sector
The proposed changes have raised concerns within Kenya’s growing cryptocurrency community. BitKE has consistently highlighted that increased surveillance and data access by KRA could impact crypto traders and exchanges, especially if KRA seeks to monitor peer-to-peer transactions and digital asset holdings. Given the decentralized and pseudonymous nature of cryptocurrencies, enforcing such measures could present significant challenges.
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Furthermore, the lack of clear regulatory frameworks for cryptocurrencies in Kenya means that any attempt by KRA to access crypto-related financial data could lead to legal ambiguities and potential conflicts with existing privacy rights. Stakeholders in the crypto space are advocating for transparent and inclusive policymaking to ensure that innovations in digital finance are not stifled by overreaching regulations.
As Kenya revisits the contentious issue of granting KRA access to private financial data, it must balance the need for effective tax enforcement with the protection of individual privacy rights. The implications extend beyond traditional financial systems, potentially affecting the burgeoning crypto sector. Engaging with all stakeholders, including those in the digital asset space, will be crucial in crafting policies that uphold constitutional rights while addressing fiscal objectives.
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