Finance Bill 2025: MPs Make Decision on Granting KRA Access to Kenyans' Bank Data

The National Assembly's Finance Committee has rejected the Finance Bill 2025 proposal that would have granted the Kenya Revenue Authority (KRA) access to Kenyans' data in banks and businesses.

In its report published on Monday, June 16, the committee noted that many Kenyans had raised concerns regarding the proposal to remove protections under Section 59A that currently shield businesses' internal systems and sensitive data.

Specifically, the Kenya Bankers Association (KBA) stated that the move would be considered a breach of data privacy if they were forced to integrate their systems with those of the KRA.

Therefore, the committee, led by Molo MP Kuria Kimani, resolved that the proposal would have been unconstitutional as it infringed on the right to privacy.

"In the matter of granting the Kenya Revenue Authority (KRA) sweeping access to personal data for tax compliance purposes, particularly where trade secrets or personal customer data are involved, the Committee observed that the proposed provision does not meet the threshold set out under Article 31(c) and (d) of the Constitution of Kenya, which guarantees the right to privacy," read the statement in part. 

"The Committee further noted that Section 51 of the Data Protection Act prescribes clear conditions under which exemptions to data protection obligations may be permitted. In addition, Section 60 of the Tax Procedures Act already grants the Commissioner or an authorized officer sufficient legal authority to access necessary data for tax administration, subject to the requirement of obtaining a court-issued warrant."

‍VAT Proposals

Further, the Committee objected to the move by the National Treasury to reclassify some items from the zero-rated to the exempt category. 

The items listed in the report were locally assembled and manufactured mobile phones, motorcycles, electric bicycles, solar and lithium-ion batteries, electric buses, inputs or raw materials, whether locally purchased or imported, for the manufacture of animal feeds and Bioethanol vapour (BEV) stoves.

It was noted that the proposal was regressive, given that the listed items were put on a zero-rated table as an incentive for investors.

With the items currently zero-rated, the businesses do not charge customers for VAT, and they can also claim VAT refunds for the inputs.

"The Committee noted that these supplies were only recently moved to zero-rated status under the Finance Act, 2023, as part of efforts to support local industries and reduce the cost of essential goods. Therefore, reverting them to exempt status would undermine the objectives of that reform and introduce uncertainty into the tax framework," read the report in part.

"Such a change could increase production costs, costs likely to be passed on to consumers, ultimately discouraging investment and hindering economic growth."

Corporate Tax

The Committee also rejected the bill proposal that sought to remove the provision granting a reduced 15% corporate tax rate to companies constructing at least 100 residential units annually or assembling motor vehicles locally, thereby subjecting these entities to the standard 30% corporate tax rate from inception.

"Concerning the proposal to eliminate the 15% corporate tax rate granted to companies engaged in the local assembly of motor vehicles and the construction of at least 100 residential housing units, the Committee, after engaging with stakeholders, resolved to withdraw the proposal," read the report in part.

The preferential tax rate was considered crucial in supporting strategic sectors that significantly contribute to employment creation, industrial development, and the delivery of affordable housing. Removing the incentive risked disrupting ongoing investments, diminishing investor confidence, and undermining national efforts to promote local manufacturing and reduce the housing deficit."