Kenya Revenue Authority (KRA) is seeking for exemptions from key provisions of the Data Protection Act 2019.
This strategic push is aimed at granting the tax authority broader access to detailed data about Kenyan taxpayers.
The Finance Bill 2024
The Finance Bill 2024, proposes amendments in the Data Protection Act 2019, to enable KRA to access taxpayers' data without a court order.
“The Bill also seeks to amend section 51 of the Data Protection Act (Cap. 411C) to provide for the exemption of the processing of personal data that relates to the assessment, enforcement or collection of any tax or duty from the provisions of the Data Protection Act,” the Finance Bill 2024 proposed by Molo MP Kuria Kimani reads.
This includes data held by controllers such as the National Transport and Safety Authority (NTSA), banks, telecommunication companies, utility firms, schools, and land registries among others.
The Finance Bill 2024, is also proposing to allow KRA to integrate its systems and those of data controllers.
Data Protection Act, 2019
The Data Protection Act 2019, establishes clear guidelines and obligations for data processors and controllers, ensuring that personal data is handled with utmost care and only for lawful purposes.
It is designed to prevent the misuse, unauthorized access, and exploitation of personal data, setting a high standard for data security and privacy.
For the Kenya Revenue Authority (KRA), this legislation imposes specific limitations on the scope of data they can access and how it is processed.
These restrictions are intended to protect taxpayers from invasive scrutiny and potential abuses of power, ensuring that personal financial details are not exposed.
Implications for Kenyans if KRA is granted access to personal data
The Kenya Revenue Authority's (KRA) proposed exemptions from the Data Protection Act carry significant implications for taxpayers.
Here's how these changes could potentially impact the average citizen
Privacy Concerns
The most immediate concern for taxpayers revolves around privacy. With broader access to detailed financial data, including bank transactions, property holdings, and other sensitive information, the risk of data misuse or breaches escalates.
Taxpayers could find their financial details exposed not just to tax officials but potentially to unauthorized parties, should data security measures fail.
The possibility of such breaches raises anxiety about financial security and personal privacy among the general population.
READ: KRA collections hit Sh1.499 trillion on improved tax mobilisation
Risk of Data Misuse
Even with stringent protocols, the increased handling of data heightens the risk of misuse. Situations could arise where data is accessed for purposes other than tax collection, whether inadvertently or through deliberate actions.
This situation could lead to a misuse of taxpayer information, potentially leading to harassment or exploitation based on financial profiles.
Increased Tax Compliance and Revenue
On the flip side, the KRA’s access to more comprehensive data could significantly enhance its ability to identify and address tax evasion. By closing loopholes and tracking high-value transactions more effectively, the KRA could potentially increase tax compliance substantially.
This would not only bolster the county’s revenue but also ensure a fairer tax system where high earners and large corporations contribute their rightful share.
Reduction in Tax Evasion
With enhanced access to data, the KRA could more effectively pinpoint discrepancies in tax filings and uncover hidden assets or undeclared income.
This capability could deter tax evasion, leading to a more equitable distribution of tax responsibilities and reducing the burden on compliant taxpayers.
READ: How much KRA assistants raised after netting 30,000 Kenyans in tax crackdown
Legal Implications
Legally, granting the KRA such exemptions could set a precedent that might encourage other governmental agencies to seek similar relaxations in data protection laws.
This could gradually erode the robustness of the Data Protection Act, potentially diluting its effectiveness in safeguarding personal data against misuse.
It might also lead to increased legal challenges as individuals and organizations could contest these exemptions on the grounds of privacy rights and constitutional guarantees.
Social Implications
Socially, the biggest impact would likely be on public trust in government institutions. If taxpayers perceive that their data can be accessed and used freely by government bodies, it could lead to a significant erosion of trust.
This distrust could not only affect the relationship between citizens and the government but might also result in lower voluntary compliance with tax obligations as taxpayers may feel vulnerable or unfairly targeted.
Economic Implications
Economically, the KRA's enhanced access to taxpayer information could lead to more effective tax enforcement and potentially significant revenue increases. This additional revenue could be pivotal in funding public services such as healthcare, education, and infrastructure development.
It could also help reduce the fiscal deficit and potentially lower the need for borrowing, leading to better financial stability for the country.
This content was created with the help of an AI model and verified by the writer.