Backlash as Treasury seeks sweeping KRA asset seizure powers

A push by the National Treasury for taxpayers to secure mandatory stay orders to protect their accounts from being frozen by the tax authority has triggered a sharp backlash from tax analysts and private sector players.

Business sector players argue that the proposal risks severe overreach by the Kenya Revenue Authority (KRA).

The controversial proposal, championed by National Treasury and Economic Planning Cabinet Secretary John Mbadi, would alter how asset preservation is handled during active tax disputes.

Currently, businesses can often stall aggressive recovery measures by appealing to tribunal bodies, but the new framework shifts a heavier legal burden directly onto the taxpayer.

Contractors and engineering firms, who already grapple with tight cash flows and delayed government payments, face significant operational exposure if automated bank freezes are granted wider statutory protections.

Tax experts warn that requiring a formal court or tribunal stay order to prevent enforcement actions gives the taxman excessive leverage.

The private sector argues that administrative errors could lead to immediate account closures, halting payrolls and supply chains before a firm can even secure an emergency legal hearing.

Legal experts have questioned the fairness of the move, noting that it tilts the scales heavily against small and medium enterprises that lack the legal resources to secure rapid injunctions.

The National Treasury maintains that the policy is intended to prevent rogue taxpayers from using frivolous appeals as a loophole to hide assets or delay legitimate revenue collection.

However, business lobbies counter that the strategy undermines the principles of a predictable tax system, which is crucial for infrastructure investment and overall economic stability.

With the proposal drawing heavy fire, stakeholders are now calling for urgent legislative reviews to protect businesses fromabrupt disruptions.