Finance Bill 2026: Lawmakers demand KRA disclose evidence in tax assessments
By Kenneth Mwenda, June 16, 2026Kenya’s Finance Bill 2026 has sparked debate in Parliament after the National Assembly’s Finance and Planning Committee proposed stronger safeguards for taxpayers in a new data-driven tax system. The changes target how the Kenya Revenue Authority (KRA) issues assessments when it relies on third-party information instead of taxpayer-declared figures.
Lawmakers want KRA to disclose the data it uses and, in disputed cases, carry the burden of proving its assessments are correct.
The proposals come as Kenya expands the use of digital systems such as eTIMS, iTax and other third-party data sources to detect under-declared income and improve compliance. While the system is meant to strengthen revenue collection, it has raised concerns about fairness, transparency and taxpayer rights.
KRA’s expanded powers under Finance Bill 2026
The Finance Bill gives the KRA Commissioner broader authority to issue tax assessments where available data shows possible underpayment. This includes information drawn from banks, customs records, electronic invoicing systems and other lawful third-party sources.
The Committee supports this shift towards data-driven tax administration but insists that safeguards must match the increased power. It proposes a new Section 29A in the Tax Procedures Act that would require KRA to disclose the information and calculations used when raising an assessment.
According to the Committee, disclosure should not be optional. It should be a condition for a valid assessment. This means taxpayers must see the evidence used against them before a demand becomes enforceable.
Kuria Kimani defends the proposal in Parliament
Finance and Planning Committee Chair Kuria Kimani defended the changes during parliamentary debate. He said the reforms aim to balance stronger enforcement with fairness to taxpayers.
“The provision is anchored on Kenya’s self-assessment system under which taxpayers declare their own income and tax liabilities. However, the Commissioner may also require information obtained from third-party sources, electronic tax systems, financial records, customs data and other lawful sources which may indicate discrepancies in declared tax provisions,” Kimani told the House.
He added that while the new system improves tax collection, it must respect due process.
“While the proposal strengthens tax administration by enabling data-driven systems, it is necessary to provide adequate procedural safeguards to protect taxpayers’ rights.”
Kimani further explained the committee’s recommendation:
“The Commissioner must disclose the information, sources and computations relied upon in making an assessment. Such disclosure should be a condition for the validity of the assessment.”
On disputes, he was clear about responsibility:
“In case of a dispute, the commissioner bears the burden of demonstrating the accuracy and reliability of information used.”
He warned that allowing KRA to issue assessments without revealing sources would violate basic fairness principles. He argued that taxpayers should not be forced to defend themselves against undisclosed evidence.
Why the changes matter for taxpayers
Kenya’s tax system has moved steadily towards digital enforcement. KRA now cross-checks returns using bank data, invoices, customs records and other electronic systems. This has helped reduce tax evasion but also increased disputes over data accuracy and access.
Taxpayers have raised concerns that they may receive assessments based on information they cannot see or verify. The proposed Section 29A seeks to address this by forcing KRA to disclose its evidence and calculations before finalising an assessment.
If passed, the reforms could improve trust in the tax system by giving taxpayers a clearer chance to respond. They also align with principles of natural justice, which require that a person knows the case against them before a decision is made.
The Finance Bill 2026 is still under parliamentary review, and the final version may change before it becomes law. Lawmakers will decide whether to adopt the Committee’s recommendations fully or adjust them during the final stages of debate.
Tax experts and civil society groups say the outcome will shape Kenya’s tax administration for years. While the government seeks to expand revenue collection through digital systems, stakeholders continue to push for a balance between efficiency and taxpayer rights.