For many Kenyans, the tax system often feels unfair. Ordinary workers pay what is due because their salaries are visible, yet those with complex businesses, multiple income streams or high value assets can quietly under declare what they earn.
A big part of this imbalance comes from the fact that the Kenya Revenue Authority (KRA) cannot easily verify what taxpayers report. Under current law, KRA must go through a long, court driven process before accessing bank records even when there is strong suspicion of tax evasion.
Section 59A(1B) of the Tax Procedures Act blocks KRA from obtaining personal banking information without a court order. This means officers must prepare affidavits, file in court, wait for a judge’s ruling, and only then receive the information needed to confirm wrongdoing.
By that time, money may have moved, accounts may have been closed and the trail may have gone cold. It is a system designed for a slower era, not for today’s fast moving financial world.
Global models
Other countries facing similar challenges modernised their laws years ago. In South Africa, Namibia, Lesotho and Seychelles, tax authorities can request bank information directly when there is reasonable suspicion of non compliance.
In Europe, countries like Denmark, Greece, Austria, Luxembourg and the United Kingdom have dismantled bank secrecy for tax purposes and rely on clear statutory ‘information powers’ that allow tax officials to obtain relevant financial data quickly.
These systems are not free for all regimes they are anchored in legal safeguards such as proportionality, relevance and oversight. But they make tax enforcement predictable, consistent and evidence driven qualities that Kenya’s system has long lacked.
The impact of such reforms is not abstract. When a tax authority can compare what people declare with what flows through their accounts, evasion becomes harder, compliance becomes easier and the entire system becomes fairer.
It means professionals, high income earners and large businesses cannot quietly under declare income while ordinary workers shoulder the burden. It means audits are based on facts, not guesswork. And it means tax policy becomes more predictable because the government can rely on stable revenue instead of sudden shortfalls.
Tax ratios
Kenya’s tax-to-GDP ratio remains below the 25 percent benchmark, especially when compared with countries that permit controlled access to bank data and consistently achieve higher revenue performance.
Across Africa, nations such as Lesotho (around 30 percent), Namibia (27 percent), South Africa (26 percent), and Seychelles (26 percent) all operate above this threshold. A similar pattern appears in Europe, where Denmark reaches approximately 42 percent, while Greece, the United Kingdom, Austria and Luxembourg each collect about 26-27 percent of their GDP in taxes.
Even outside these regions, countries like Jamaica in the Caribbean maintain tax-to-GDP levels of roughly 26 percent. Together, these examples illustrate a clear trend: jurisdictions that enable regulated access to financial information tend to achieve stronger tax mobilisation outcomes than those, like Kenya, where such access remains limited and procedurally cumbersome.
Kenya, by comparison, sits around 17 percent. With a GDP of roughly Sh18 trillion, a tax to GDP ratio of 25 percent would translate to about Sh4.5 trillion in annual tax revenue. Today, Kenya collects closer to Sh3.06 trillion. That means the country is potentially missing out on Sh1.4 trillion every year, money that could ease the cost of living, reduce borrowing, stabilise debt and fund schools, hospitals and infrastructure without squeezing taxpayers further.
India lesson
India offers a useful reminder that access alone is not enough despite having legal powers to obtain bank information, its tax to GDP ratio still sits below 25 percent because of structural factors like a large informal sector and low average incomes. The lesson is simple, access is a powerful tool, but it must be paired with strong institutions and consistent policy.
For Kenya, the real question is whether the law should evolve to match the realities of a modern economy. A reformed framework would give KRA clearly defined administrative powers to obtain relevant banking information swiftly when there is reasonable suspicion of non compliance but only under strict safeguards. Strong data protection rules must ensure that information obtained for tax purposes is never used for political, commercial or personal ends.
If designed well, such a system would not be a licence for intrusion. It would be a practical tool to make tax collection easier, more predictable and more consistent. It would help close loopholes that allow a few to avoid contributing while the majority carry the load. And it would give Kenya the chance to build a fairer, more transparent and more sustainable tax system, that supports national development without overburdening ordinary citizens or relying excessively on debt.
A tax system that is fair, predictable and anchored in verifiable facts gives citizens confidence and gives the country room to grow. When public resources are used with discipline and graft is confronted head-on, revenue rises, patriotism deepens, and the spirit of kulipa ushuru ni kujitegemea becomes a lived national culture.