Taxman’s plan to mine telecom data sparks row

Times Tower. FILE PHOTO | NMG 

By BRIAN NGUGI

More by this Author

Summary

• The Kenya Revenue Authority (KRA), which is facing a mountainous task of raising enough revenues to finance President Uhuru Kenyatta’s Sh2.97 trillion budget, is hoping that information from these sources will boost its quest to unearth undisclosed income sources and boost its revenue collection.
• Upon accessing the data, KRA hopes to probe and audit individuals whose transactions are not consistent with their declared incomes or filed tax returns.
• KRA commissioner-general John Njiraini said the agency is turning to use of technology to bring more Kenyans on board and expand the tax base.

Hospital payrolls, the National Construction Authority records and telecoms data have become the taxman’s new hunting grounds in its ongoing crackdown on tax cheats, it was announced Monday.

The Kenya Revenue Authority (KRA), which is facing a mountainous task of raising enough revenues to finance President Uhuru Kenyatta’s Sh2.97 trillion budget, is hoping that information from these sources will boost its quest to unearth undisclosed income sources and boost its revenue collection.

Upon accessing the data, KRA hopes to probe and audit individuals whose transactions are not consistent with their declared incomes or filed tax returns.

Related Content

• Work cut out for Safaricom chief as firm posts Sh7.6 bn profit
• Safaricom paid Sh7.5 billion for Nairobi security network contract
• Treasury gets Sh40bn Safaricom pay cheque
• KRA targets small business in a bid to net Sh974 billion

KRA commissioner-general John Njiraini said the agency is turning to use of technology to bring more Kenyans on board and expand the tax base.

“The tax base expansion strategy focuses on tapping into the potential provided by technology to identify and bring into the tax net those engaged in gainful business and who ought to be paying tax, but are not,” Mr Njiraini said during the launch of KRA’s annual tax sensitisation month in Nairobi. “By applying this strategy, we anticipate to net an additional 500,000 taxpayers from whom we expect to collect approximately Sh60 billion in the current year,” he said.

Mr Njiraini said that the plan requires the agency to acquire information through access to key databases in both the private and public sectors.

“Some of the databases we have targeted in the first stages include those on mobile payments and those maintained by regulatory and professional bodies,” he said, adding that the agency is currently moving to sourcing data from major private players such as public infrastructure contractors and hospitality service providers, including major hospitals. Treasury secretary Henry Rotich, who spoke at the event, said KRA’s plan to use third party data would boost its revenue collection efforts and ease the tax burden on the few currently on board. “The use of i-Tax system will help detect non-compliance through data matching and third party utilization,” said Mr Rotich.

But the plan immediately elicited sharp reactions from professional groups and consumer lobbies which said segments of the planned data mining will be in violation of citizens’ right to privacy as provided for in law. Banks have in recent weeks been writing to their customers to share their Personal Identification Number (PIN) to be linked to their bank accounts.

Also Read

NewsEx-Coop Bank CEO’s flower farm sold in auction deal

NewsNairobi Hospital roped into fight over failed breast enlargement

Consumer Federation of Kenya (Cofek) secretary-general Stephen Mutoro said the plan borders on breach of confidentiality agreement that consumers have with banks. “As long as Article 31 of the Constitution of Kenya is not amended, any statute or regulation that infringes on the privacy of Kenyan consumers without a lawful court order, and in the name of hunting down tax evaders, will be an illegality,” said Mr Mutoro.

“In any case, it's the Mobile Network Operators and banks that are entrusted with the privacy and confidentiality of such private data. We cannot afford to break the law in pursuit of perceived offenders.”

Mr Njiraini, however, insisted that the move has legal backing under the Tax Procedures Act.

Mr Rotich directed the tax man to expedite the integration of KRA’s automated tax payment service iTax with the integrated Customs Management System and IFMIS, the government payments system to seal the loopholes that deny the government billions of shillings every year.

“This will make customs declaration processes more customer friendly and prevent concealment, undervaluation, misdeclaration and falsification of imports documents,” said Mr Rotich.

“This will further enable KRA identify all the persons and firms doing business with the government either at the national or at the county level.”

The Treasury is seeking to collect Sh1.69 trillion in ordinary revenue in the current fiscal year.