Kenya Bankers Deny KRA Access to Customer Data in Push for System Integration Nairobi, Kenya
A brewing standoff between the Kenya Revenue Authority (KRA) and the country’s banking sector has taken center stage, as Kenyan bankers resist granting the tax authority direct access to customer financial data. The dispute arises amid KRA’s push to integrate its systems with those of commercial banks, a move aimed at enhancing tax compliance and curbing revenue leakages but one that has raised alarms over privacy and operational autonomy.
The Kenya Bankers Association (KBA), representing the country’s financial institutions, has firmly opposed the proposal, arguing that such integration threatens the confidentiality of customer information and could undermine trust in the banking system. In a statement released earlier this week, KBA emphasized that while the banking sector supports efforts to improve tax collection, any system integration must respect existing legal frameworks and protect customer rights.
“KBA acknowledges the importance of tax compliance for national development,” the statement read. “However, direct access to customer accounts by KRA poses significant risks to privacy and data security, which are foundational to the banking industry. We urge a collaborative approach that balances revenue goals with the protection of customer interests.”
KRA’s Integration Agenda
The KRA has been vocal about its intention to modernize tax collection through technology-driven solutions. The proposed integration would allow the tax authority to monitor transactions in real time, flagging suspicious activities and ensuring timely tax payments. According to KRA Commissioner General Humphrey Wattanga, the move is part of a broader strategy to close loopholes that have long allowed tax evasion to flourish.
“Real-time access to financial data is a game-changer in our fight against revenue losses,” Wattanga said in a recent press briefing. “We are not targeting innocent Kenyans but rather those who exploit gaps in the system to avoid their fair share of taxes.”
The tax body has pointed to the success of similar initiatives in other countries, such as India and Brazil, where integrated systems have boosted revenue collection. However, Kenyan bankers argue that local conditions—including weaker data protection enforcement and a history of government overreach—make such comparisons impractical.
Privacy and Legal Concerns
At the heart of the dispute is the question of customer privacy. Kenya’s Data Protection Act of 2019 safeguards personal information and imposes strict conditions on its sharing, requiring consent or a clear legal basis. Bankers contend that KRA’s proposal could violate these provisions, exposing them to lawsuits and reputational damage.
Legal experts have weighed in, noting that any forced integration would likely require amendments to existing laws. “The current framework does not grant KRA blanket access to private financial data,” said Jane Mwangi, a Nairobi-based lawyer specializing in data privacy. “Without legislative backing or judicial oversight, this move could be challenged in court.”
Customers, too, have expressed unease. “I trust my bank to keep my money safe, not to hand over my details to the government without my say,” said Peter Kimani, a small business owner in Nairobi. “What’s next—tracking every shilling I spend?”
A Stalemate with Economic Stakes
The standoff comes at a critical time for Kenya, which is grappling with a ballooning public debt and pressure from international lenders like the International Monetary Fund (IMF) to boost domestic revenue. The government has set ambitious tax collection targets for the 2024/2025 fiscal year, and KRA views system integration as a key tool to meet them.
However, bankers warn that eroding trust in the financial system could have broader economic consequences. “If customers feel their privacy is at risk, they may pull back from formal banking altogether,” said John Gachora, CEO of NCBA Bank and a prominent voice in the KBA. “That would hurt financial inclusion and, ironically, reduce the tax base KRA is so keen to expand.”
Searching for a Middle Ground
Both sides have signaled a willingness to negotiate, though no clear resolution has emerged. KBA has proposed alternatives, such as enhanced reporting requirements that stop short of direct system access, while KRA insists that half-measures won’t suffice to tackle systemic tax evasion.
As the debate unfolds, analysts predict that the outcome will set a precedent for the balance between state authority and private sector autonomy in Kenya. For now, the banking sector remains resolute, leaving KRA’s integration ambitions on hold—and Kenya’s taxpayers watching closely.
