KRA Gets Nod from The Courts to Snoop into M-PESA and Bank Records for Tax Compliance


Back in October 2018, we learnt that KRA had earmarked mobile money transaction data to boost tax revenues. The plan was to target mobile money transaction for taxpayers, and match them data with what the same citizens were remitting to the state.

Furthermore, the development targeted going through tons of data for more than 28.9 million active mobile customers (latest numbers) alongside financial data from the likes of banks, and data associated with key accounts such as real development and school fee payments, to mention a few to nab tax cheats.

The goal? To make sure that the affected folks pay their fair share of tax.

The process was supported by the tax collector as a model that would revamp compliance and ‘audit interventions’ and meet objectivity with taxpayers.

Furthermore, KRA’s agenda was supported by ICT CS Joe Mucheru who said that KRA has a legal mandate to get access to and use transaction data held by mobile money operators, among many other fintech companies and banks to help the tax collector hit projected tax volumes.

Sections of the law that supported the move were however stopped by the Court of Appeal in 2018. Thus, KRA could not go on with its spying agenda.

According to Business Daily, the same court has lifted its ruling, meaning KRA now has the power to pry into your banking and mobile money data to see if you are cheating the system.

The restored law is named Section 60 of the Tax Procedures Act that tasks the said third parties to share key data with KRA.

Organizations that will not provide this information to the taxman will be fined KES 1 million or be jailed for three years.

Suspected tax cheats will also see their documents searched and seized for investigation.