KRA to Snoop on MPESA and Bank Accounts

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The Court of Appeal has restored KRA’s power to snoop on tax evaders’ MPESA and bank accounts. In a ruling, the court argues that hindering KRA from accessing the information may cripple the agency’s mandate to collect taxes.

Furthermore, the court felt that KRA would suffer irreversible loss of huge sums of money. The reinstated section of the law will compel third-party firms such as telcos, banks, and schools to share information on persons and firms suspected to be evading taxes.

The High Court had in 2018 stopped KRA from implementing Section 60 of the Tax Procedures Act 2015. Section 60 states that the Commissioner or an authorized officer shall, with a warrant, have full and free access to any building, place, property, documents, or data storage device for the purposes of administering a tax law.

In this case, the Commissioner or authorized officer may;

  • (a) make an extract or copy of any documents or information stored on a data storage device to which access is obtained under subsection (1)
    (b) seize any documents that, in the opinion of the Commissioner or authorised officer, maybe material in determining the tax liability of a taxpayer and retain such documents for the period specified in subsection (9);
    (c) seize and retain a data storage device when a physical copy or electronic copy of information stored on the device has not been provided for in the period specified in subsection (9);
    (d) require the owner or lawful occupier (including an employee) of a building or place to which access is obtained under subsection (1) to answer questions relating to any document found in the building
    or place, whether on a data storage device or otherwise, or to any entry in the document, and to render such explanation and give any information that the Commissioner or authorised officer may require in relation to tax law;
    (e) require the owner or lawful occupier (including an employee) of a building or place to which access is obtained under subsection (1) to provide access to decryption information necessary to decrypt data to which access is sought under this section;
    (f) at the risk and expense of the occupier of the premises to which access is obtained under subsection 1), open and examine any package found in the premises; or
    (g) take and retain without payment such reasonable samples of any goods as the Commissioner or authorised officer may think necessary for the exercise of functions under tax law.

Those that defy KRA’s orders will be liable to a fine of Sh1 million or a jail term of three years or both should they fail to provide details to the taxman.

Source: Kenyan Wallstreet

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