KRA wins case challenging its enforcement powers

The Kenya Revenue Authority (KRA) has successfully defended a petition challenging the constitutionality of its investigation and enforcement powers provided under the Tax Procedures Act.

This is after High Court judge Weldon Korir ruled in favour of the taxman in a judgement delivered on February 20, 2020, in Nairobi. The petition was filed on April 12, 2017, challenging Sections 57, 58(2), 59 and 99 of the Tax Procedures Act.

Justice Korir said the right to privacy can be limited within the law and in the public interest, noting that the privilege not to incriminate oneself cannot be used to get away with a crime.

The said sections empower KRA to inspect taxpayers’ goods and records as well as direct the taxpayers to produce records and information on their tax liability for purposes of administering a tax law.

"Section 57 allows the information received by KRA to be admissible in civil and criminal cases," noted the statement from KRA.

The petitioner had alleged that the provisions are a breach to the constitutional rights to privacy, right not to self-incriminate and right to fair administrative action. Kenya’s tax system is based on self-declaration.

KRA said more often, taxpayers do not disclose, either by design or omission, all their sources of income hence the importance of the above sections of the law which authorised KRA to question and interrogate a person’s tax affairs to confirm accuracy.

KRA argued that the powers were necessary for the investigation and enforcement department to obtain all essential information and take necessary actions to make a fair decision on the tax liability of taxpayers.

The High Court observed that the said provisions of the law are only meant to enforce the tax laws after a taxpayer fails self-assessment for tax purposes or shows dishonest.

The court noted that the Tax Procedures Act has safeguards that ensure taxpayers receive fair administrative action from the tax collector.