Constitutionality of Sections 57, 58(2), 59, and 99 of the Tax Procedures Act Affirmed: The Case of Okiya Omtatah Okoiti v Attorney General & Kenya Revenue Authority [2020] eKLR

1. Background

On 20 February 2020, the High Court of Kenya rendered judgment in Okiya Omtatah Okoiti v Attorney General & Kenya Revenue Authority [2020] eKLR, Petition No. 156 of 2017, upholding the constitutionality of sections 57, 58(2), 59, and 99 of the Tax Procedures Act, No. 29 of 2015 (hereinafter “the TPA”).

The petitioner, Okiya Omtatah Okoiti, had moved the Court seeking declarations that the said provisions were unconstitutional on the grounds that they violated the right to privacy under Article 31 and the right to a fair trial, specifically the privilege against self-incrimination under Article 50(2)(l) of the Constitution of Kenya, 2010.

2. Impugned Provisions and Their Application

The impugned sections of the TPA confer upon the Kenya Revenue Authority (KRA) powers necessary for enforcement and compliance purposes. In particular, they authorize the Commissioner to:

• Enter premises and inspect goods, records, and equipment for tax purposes (s. 57);
• Require any person in possession of documents or information relevant to a taxpayer’s affairs to produce them (s. 58(2));
• Obtain and make extracts or copies of such documents or information (s. 59); and
• Seize documents where necessary to determine the tax liability of a person (s. 99).

Failure to comply with such requests constitutes an offence punishable by a fine not exceeding Kenya Shillings one million (KES 1,000,000), imprisonment for a term not exceeding three (3) years, or both, pursuant to section 99(2) of the TPA.

The KRA routinely invokes these provisions to obtain information from third parties such as banks, financial institutions, and debtors of a taxpayer in order to establish the taxpayer’s correct liability and facilitate collection of unpaid taxes.

3. Petitioner’s Case

The petitioner argued that the said provisions infringed upon taxpayers’ constitutional rights to privacy and to protection from self-incrimination. He further alleged that the KRA had previously exercised these powers in a manner that amounted to political harassment, citing the instance in 2017 when KRA sought financial information from Diamond Trust Bank concerning Governor Ali Hassan Joho.

4. Respondents’ Position

The Respondents — the Attorney General and the Kenya Revenue Authority — maintained that the powers in question were consistent with the Constitution and necessary for the proper administration of tax laws. They submitted that any limitation of rights occasioned by the provisions was reasonable and justifiable within the meaning of Article 24 of the Constitution.

5. The Court’s Determination

The High Court dismissed the petition and held that sections 57, 58(2), 59, and 99 of the TPA are constitutional.

The Court reasoned as follows:

1. Legitimate Purpose: The impugned provisions serve a legitimate purpose in enabling the KRA to discharge its statutory mandate of assessing, collecting, and accounting for tax revenue, as established under the Kenya Revenue Authority Act, Cap 469.
2. Right to Privacy: The Court held that the enforcement powers under the TPA do not amount to an unreasonable intrusion into the private affairs of individuals within the meaning of Article 31 of the Constitution. Information obtained by the KRA is restricted to matters relevant to taxation and is protected by the confidentiality provisions under section 6(1) of the TPA, save for the specific exceptions under section 6(2).
3. Privilege Against Self-Incrimination: The Court found that the privilege under Article 50(2)(l) is not absolute and does not relieve citizens from their statutory duty to comply with tax laws. The privilege cannot be invoked to shield individuals from lawful investigations or to obstruct the performance of statutory duties by revenue authorities.
4. Safeguards: The Court further observed that the statutory confidentiality obligations imposed on the KRA are sufficient safeguards to prevent abuse of power.

Accordingly, the Court held that the use of compulsory powers to obtain documents or information which may later be used in judicial proceedings does not infringe the right against self-incrimination.

6. Related Jurisprudence

The Court distinguished this case from Robert K. Ayisi v Kenya Revenue Authority, Petition No. 421 of 2016 [2018] eKLR, in which the High Court declared section 59(4) of the TPA unconstitutional for violating advocate–client privilege protected under section 137 of the Evidence Act (Cap 80, Laws of Kenya). The Court in Omtatah clarified that the invalidation of section 59(4) was limited to instances involving privileged communication and did not extend to the broader enforcement powers under sections 57, 58(2), 59, and 99.

7. Implications of the Judgment

This decision reaffirms the broad investigative and enforcement authority of the Kenya Revenue Authority to obtain information from taxpayers and third parties for purposes of assessing tax liability and enforcing compliance.

While the judgment strengthens the KRA’s capacity to pursue non-compliance, it also raises continuing policy concerns regarding potential misuse of these powers for politically motivated or selective enforcement. The Court did not conclusively address the question of safeguards against politically instigated investigations, leaving open the need for administrative oversight and legislative clarification.

8. Conclusion

The High Court’s decision in Okiya Omtatah Okoiti v Attorney General & Kenya Revenue Authority confirms that the Tax Procedures Act, 2015 validly empowers the Kenya Revenue Authority to obtain and utilize information for tax administration purposes, consistent with constitutional principles. The Court’s interpretation underscores the balance between the State’s interest in efficient revenue collection and the protection of individual rights under the Constitution.

Disclaimer: This article is for informational purposes only and does not constitute legal advice.