Members of Parliament have foiled fresh attempts to increase the powers of the Kenya Revenue Authority (KRA) Commissioner General, including granting the taxman sweeping powers on asset seizures.
The Finance and National Planning committee of the National Assembly has shot down amendments to the Tax Procedures Act, including one that sought to compel taxpayers to secure mandatory stay orders to protect their accounts from being frozen by the taxman.
The legislators also rejected proposals to include weekends and public holidays in computing timelines for filing tax objections and appeals.
At the same time, the committee has presented additional amendments to protect taxpayers from an all-powerful tax czar, including requiring the KRA to disclose its sources of third-party data deployed in tax assessments, and has also allowed taxpayers to reject or amend pre-populated tax claims.
The recommendations by the Kuria Kimani-led Finance committee extend a trend where MPs have stood in between the government’s push for the creation of an all-powerful KRA which would be unleashed on taxpayers.
The State had proposed deletion of Section 42 (14, e) of the Tax Procedures Act, which currently provides that KRA cannot attach accounts in instances where a taxpayer has filed an appeal disputing the taxman’s assessment.
Business sector players, however, pushed back, arguing that the proposal risks overreach by KRA, will still be injurious to business cashflows and will derail Kenya’s credentials as far as tax justice is concerned.
“The committee noted that such a measure could result in significant cash flow constraints and operational disruptions for taxpayers, particularly where amounts recovered are later found not to be payable,” the Finance Committee said.
“The Committee further observed that the proposal raises concerns relating to the right to fair administrative action, access to justice, and delays in the refund of amounts collected where taxpayers are successful in their appeals.”
This was the fourth time in the recent past that the State is attempting to claw back on the Tax Procedures Act’s protection of taxpayers as far as agency notices are concerned.
On the proposal to include weekends and public holidays in computing timelines for filing tax objections and appeals, the Committee noted that this would shorten the period available to taxpayers to exercise their rights and increase the risk of procedural default.
A new amendment, Clause 29A, will be introduced to the Tax Procedures Act to require the KRA Commissioner General to disclose information sources and computations relied upon in issuing an assessment.
The Commissioner is also expected to bear the responsibility of demonstrating the accuracy and reliability of the information used.
This is after the Finance Bill moved to empower the KRA Commissioner to issue tax assessments based on information obtained from third-party sources, electronic tax systems, employer filings and audit records.
Previously, the Finance Bill 2025 had proposed measures to empower the taxman before Parliament’s freeze, including a proposal to include Saturdays, Sundays and public holidays in computation of statutory time for lodging objections and appeals.
The Treasury also unsuccessfully pitched to empower KRA to issue notices in recovery of taxes from third parties owing a taxpayer despite a taxpayer appealing against the assessment specified in a decision of the tribunal or court. The Law Society of Kenya (LSK) was among stakeholders who called for the rejection of the proposal this year, highlighting the circumvention of taxpayer rights.
“The proposal would undermine taxpayers’ rights to justice, appeal and fair administrative action,” LSK said.
The push to create an all-powerful KRA has emanated from pressure to improve domestic revenue mobilization, which has underperformed, by enhancing enforcement action.
KRA has a target of raising Sh2.985 trillion in ordinary revenue in the fiscal year starting July 1, even as it struggles to meet the current target of Sh2.784 trillion for the year to June 30.
Despite freezing part of proposals to embolden the KRA Commissioner, MPs have backed the strengthening of the taxman’s enforcement framework for the recovery of government revenue collected on behalf of other government entities.
KRA will be allowed to deploy the same processes to collect a fee, levy or charge and to recover the unpaid amount as a civil debt due to the government in the same manner as unpaid tax under a tax law. The proposal to re-introduce a one-year tax amnesty from July 1 to cover liabilities accrued up to December 31, 2025, has also been upheld even as MPs warn of the creation of a moral hazard.
“The repeated use of tax amnesty programmes may create moral hazard by weakening the culture of voluntary compliance as some taxpayers may delay payment of taxes in anticipation of future waivers on penalties and interest,” the Finance Committee said.
“This may create an unfair environment where compliant taxpayers bear the burden while non-compliant taxpayers benefit from future relief measures.”
