Section 7 of the Tax Procedures Act (TPA) is a turning point for controversy, given Kenya’s new Constitution dispensation, which intended to limit abuse of police powers and discretion to confer powers equivalent to those of police officers on other parts of the executive branch due to historical abuse.
However, Section 7 of the Tax Procedures Act grants sweeping powers to Kenya Revenue Authority (KRA) officers.[i] The grave part is that Subsection 2 of the Tax Procedures Act permits these officers to enter premises, search vessels, seize evidence, and use such material in legal proceedings, which powers are equivalent to those of police officers without judicial oversight or scope limiting the collection of data, limits on the number of entries into private premises. Even though it is intended to bolster tax enforcement, it is a suboptimal measure; the provision raises significant constitutional questions because it limits economic freedoms and has long-term consequences on the economy and tax administration issues.
Public Choice Theory explains how self-interested behaviour influences decisions in political and bureaucratic institutions. Public choice applies the theories and methods of economics to the analysis of political behaviour. [ii] Section 7 appears to centralise excessive power in the hands of bureaucrats and politicians, thereby undermining the rights guaranteed in the Constitution of Kenya 2010. In this analysis, I will show how this legal measure that can’t survive the Constitutional threshold encourages inefficiency, abuse, and eroding taxpayer rights, ultimately undermining public welfare.
Distinct Functions: Police Powers vs. Tax Administration
In Kenya, police powers and tax administration are distinct functions of government, rooted in separate legal mandates and institutional expertise.
In economics, tax administration and policing are considered public goods. Pure public goods are Goods that are perfectly non-rival in consumption and are non-excludable, where non-rivalry in consumption means that one individual’s consumption of a good does not affect another’s opportunity to consume the good, and non-excludability means that individuals cannot deny each other the chance to consume a good.[iii] Tax Administration and National Policing Service are non-excludable (no one can be easily prevented from benefiting) and non-rivalrous (one person’s benefit doesn’t reduce others’). Tax administration ensures funding for public services, benefiting society broadly, while policing provides safety and order, essential for economic stability and growth. Both create widespread benefits that are difficult to privatize effectively.
Police powers, as defined by Black’s Law Dictionary, are the state’s authority to regulate behaviour and ensure public welfare, and in Kenya’s Constitutional architecture, are exercised by the National Police Service (NPS), established under Article 243 of the Constitution. For the police to be involved in any matter, probable cause must exist or articulate suspicion that a crime is ongoing. The NPS is legally tasked with maintaining law and order, preventing and investigating crime, and safeguarding life and property. These duties often involve coercive measures such as arrests and the use of force.
By contrast, tax administration is a financial function, entrusted to the KRA, a statutory body established under the Kenya Revenue Authority Act. The KRA is responsible for assessing taxes, promoting compliance, conducting audits, and collecting revenues through legal, procedural channels. Unlike police enforcement, tax administration relies on systematic processes, such as issuance of notices and audits, rather than immediate physical coercion. It aims to ensure a predictable revenue stream to fund public services. Most disputes are civil and can only be criminal if they involve other felonies like fraud, which then necessitates the involvement of police if there is probable cause. These roles require different skill sets. Police officers are trained in criminal justice and emergency response, while tax administrators are trained in law, finance, and economics. Blurring these functions by giving tax officers police powers distorts public institutions’ design and jeopardizes accountability and effectiveness.
Economic Costs: Incentive Distortions and Public Choice Theory
Section 7 distorts incentive structures fundamental to a fair and efficient tax system. The threat of arbitrary searches and seizures increases compliance costs for households and firms, which may divert resources from productive investment to legal protection and excessive documentation. This creates uncertainty, undermining investor confidence and discouraging local and foreign investment. When investor confidence is undermined and investment flows are affected, the government ultimately loses revenue.
More worryingly, public choice theory highlights that bureaucrats act in their self-interest, like all individuals. With expanded coercive powers, KRA officers may substitute the intention of revenue maximisation for rent-seeking behaviours, such as soliciting bribes, rather than fostering voluntary compliance. The KRA’s history supports these fears: in 2024 alone, 19 staff were dismissed for corruption. [iv]In 2025, the Kenya Revenue Authority (KRA) removed 475 officials from approving value-added tax (VAT) refund applications and flagged 4,434 traders.[v] Such practices reduce long-term revenue and distort market competition, as firms that comply honestly are penalized while those engaging in corruption flourish. These outcomes are consistent with what public choice theorists describe as “government failure”—when public institutions serve private interests at the expense of collective well-being.
Constitutional Infringements and Legal Overreach
Section 7 also contravenes several protections enshrined in the Constitution of Kenya 2010. Article 31 guarantees the right to privacy, shielding citizens from unwarranted searches and seizures. Yet Section 7 permits intrusive enforcement without judicial oversight, paving the way for overreach. Article 47 ensures fair administrative action; a standard compromised by the unchecked power to search and seize without due process. While Article 24 allows the limitation of rights in certain circumstances, such limitations must be reasonable and justifiable. Section 7 fails to meet this threshold due to its lack of safeguards and disproportionate nature.
Moreover, Article 243 of the Constitution reserves police powers for the National Police Service, subject to independent oversight. Empowering KRA officers with similar authority creates a quasi-police service that operates outside this framework, eroding the principle of separation of powers. From a public choice perspective, this represents a case where narrow, concentrated benefits—expanded authority for bureaucrats and political elites—are secured at the expense of broad, dispersed public costs: diminished rights, rising uncertainty, and reduced trust in public institutions. This dynamic persists due to rational ignorance, a concept in public choice theory explaining why citizens, faced with complex legal provisions, remain disengaged.[vi] The public becomes passive, lacking the time and expertise to scrutinize such laws, allowing self-interested policymakers to pass controversial reforms with minimal opposition.
Historical Lessons: Abuse and Selective Enforcement
Kenya’s history warns against granting unchecked power to state agencies. During the colonial era and subsequent authoritarian regimes, tax authorities were weaponized to suppress dissent and target political opponents. The 2010 Constitution sought to dismantle this legacy by establishing institutions grounded in accountability and the rule of law. Public choice theory explains how political elites can exploit such powers to punish opponents or reward allies, while the general public bears the hidden costs of weakened institutions and lost freedoms, which harm economic outcomes. Empirical evidence further supports the case against Section 7.
The KRA’s record of corruption is well-documented, and additional coercive powers are likely to exacerbate these problems rather than solve them. Internationally, many high-performing tax systems, such as those in Scandinavian countries, maintain effective enforcement through cooperation between revenue agencies and police, without compromising civil liberties.[vii] These models demonstrate that Kenya does not need to vest tax officers with police powers to achieve compliance.
Proponents of Section 7 argue that it enhances efficiency by reducing dependence on the police and streamlining tax enforcement. However, short-term gains will likely be outweighed by long-term harms: increased corruption, taxpayer alienation, and reduced compliance. Others claim the powers are necessary to raise revenue for essential services, but coercive enforcement often backfires, driving taxpayers into the informal economy or encouraging evasion. Article 24 may be invoked to justify these powers, but without proportionality and clear procedural safeguards, the justification fails under constitutional scrutiny.
Conclusion
Section 7 of the Tax Procedures Act is fundamentally flawed. It conflates distinct state functions, invites abuse, and undermines key constitutional and international safeguards. Public choice theory reveals how the provision serves narrow bureaucratic and political interests while imposing significant diffuse costs on ordinary taxpayers. Rather than fostering a culture of compliance, it fosters fear, uncertainty, and corruption. There is one medicine and one only; Repeal Section 7 of the Tax Procedures Act.
[i] Newkenyalaw. (2024). Tax Procedures Act. Kenyalaw.org. https://new.kenyalaw.org/akn/ke/act/2015/29/eng@2024-12-27
[ii] Shughart, W. (2013). Public Choice – Econlib. Econlib. https://www.econlib.org/library/Enc/PublicChoice.html
[iii] Stantcheva, S. (2017). Lecture 8: Public Goods. https://scholar.harvard.edu/files/stantcheva/files/lecture8.pdf
[iv] Muia, J. (2025, February 12). KRA fires 19 workers over corruption. Citizen Digital. https://www.citizen.digital/news/19-kra-staff-fired-over-corruption-n357507
[v] Odhiambo, A. (2025, May 12). Hundreds of KRA staff moved in tax fraud purge. Business Daily. https://www.businessdailyafrica.com/bd/economy/hundreds-of-kra-staff-moved-in-tax-fraud-purge-5038984
[vi] Dzenis, S. (2025). Public Choice Theory as an Explanatory Framework for PC. In Political Correctness in Academia: A Public Choice Analysis (pp. 77-127). Cham: Springer Nature Switzerland.
[vii] Rothstein, B., & Tannenberg, M. (2015). Making Development Work-The Quality of Government Approach. Available at SSRN 3023883.
Kenya has benefited from its relations with the world. Multilateral, plurilateral or bilateral relationships with other countries has increased Kenyan firms and individuals market access, peace cooperations, import sources and aid. Kenya has trade relations with the United State of America and the Islamic Republic of Iran. One of the most consequential relationships between the […]
The National Infrastructure Fund Act (No. 4 of 2026) took effect on 25 March 2026 with a headline financing target: to raise about Ksh 5 trillion over ten years for highways, railways, ports, energy, information and communications technology, water and irrigation. The plan works like this. Privatization proceeds become the Fund’s starting capital. That capital […]
Introduction The matatu metaphor can be used to analytically frame Kenya’s budget as a system that is subject to binding constraints, evolving expectations, and continuous adjustment to shocks. Like the matatu sector, fiscal policy reflects a balancing act between efficiency and quick action seeking to respond to public service delivery while constrained by competing sector […]
Introduction Imagine paying the same fare to travel at 6 a.m. as you would at 6 p.m., even though the matatu is half-empty in the morning and packed in the evening. At 6 a.m., there may be more seats available than passengers willing to pay for them. By 6 p.m., the situation is reversed. Hundreds […]
Absurd hypotheticals are useful precisely because they stress-test a system until its constraints become visible. This note asks what would break first if SpaceX, now a public company following its record-breaking Nasdaq debut in June 2026, with a post-IPO market value of approximately US$ 2.5 trillion, sought a secondary cross-listing on the Nairobi Securities Exchange. […]
| Post date: Thu, Aug 7, 2025 |
| Category: Taxation |
| By: Leo Kipkogei Kemboi, |
Section 7 of the Tax Procedures Act (TPA) is a turning point for controversy, given Kenya’s new Constitution dispensation, which intended to limit abuse of police powers and discretion to confer powers equivalent to those of police officers on other parts of the executive branch due to historical abuse.
However, Section 7 of the Tax Procedures Act grants sweeping powers to Kenya Revenue Authority (KRA) officers.[i] The grave part is that Subsection 2 of the Tax Procedures Act permits these officers to enter premises, search vessels, seize evidence, and use such material in legal proceedings, which powers are equivalent to those of police officers without judicial oversight or scope limiting the collection of data, limits on the number of entries into private premises. Even though it is intended to bolster tax enforcement, it is a suboptimal measure; the provision raises significant constitutional questions because it limits economic freedoms and has long-term consequences on the economy and tax administration issues.
Public Choice Theory explains how self-interested behaviour influences decisions in political and bureaucratic institutions. Public choice applies the theories and methods of economics to the analysis of political behaviour. [ii] Section 7 appears to centralise excessive power in the hands of bureaucrats and politicians, thereby undermining the rights guaranteed in the Constitution of Kenya 2010. In this analysis, I will show how this legal measure that can’t survive the Constitutional threshold encourages inefficiency, abuse, and eroding taxpayer rights, ultimately undermining public welfare.
Distinct Functions: Police Powers vs. Tax Administration
In Kenya, police powers and tax administration are distinct functions of government, rooted in separate legal mandates and institutional expertise.
In economics, tax administration and policing are considered public goods. Pure public goods are Goods that are perfectly non-rival in consumption and are non-excludable, where non-rivalry in consumption means that one individual’s consumption of a good does not affect another’s opportunity to consume the good, and non-excludability means that individuals cannot deny each other the chance to consume a good.[iii] Tax Administration and National Policing Service are non-excludable (no one can be easily prevented from benefiting) and non-rivalrous (one person’s benefit doesn’t reduce others’). Tax administration ensures funding for public services, benefiting society broadly, while policing provides safety and order, essential for economic stability and growth. Both create widespread benefits that are difficult to privatize effectively.
Police powers, as defined by Black’s Law Dictionary, are the state’s authority to regulate behaviour and ensure public welfare, and in Kenya’s Constitutional architecture, are exercised by the National Police Service (NPS), established under Article 243 of the Constitution. For the police to be involved in any matter, probable cause must exist or articulate suspicion that a crime is ongoing. The NPS is legally tasked with maintaining law and order, preventing and investigating crime, and safeguarding life and property. These duties often involve coercive measures such as arrests and the use of force.
By contrast, tax administration is a financial function, entrusted to the KRA, a statutory body established under the Kenya Revenue Authority Act. The KRA is responsible for assessing taxes, promoting compliance, conducting audits, and collecting revenues through legal, procedural channels. Unlike police enforcement, tax administration relies on systematic processes, such as issuance of notices and audits, rather than immediate physical coercion. It aims to ensure a predictable revenue stream to fund public services. Most disputes are civil and can only be criminal if they involve other felonies like fraud, which then necessitates the involvement of police if there is probable cause. These roles require different skill sets. Police officers are trained in criminal justice and emergency response, while tax administrators are trained in law, finance, and economics. Blurring these functions by giving tax officers police powers distorts public institutions’ design and jeopardizes accountability and effectiveness.
Economic Costs: Incentive Distortions and Public Choice Theory
Section 7 distorts incentive structures fundamental to a fair and efficient tax system. The threat of arbitrary searches and seizures increases compliance costs for households and firms, which may divert resources from productive investment to legal protection and excessive documentation. This creates uncertainty, undermining investor confidence and discouraging local and foreign investment. When investor confidence is undermined and investment flows are affected, the government ultimately loses revenue.
More worryingly, public choice theory highlights that bureaucrats act in their self-interest, like all individuals. With expanded coercive powers, KRA officers may substitute the intention of revenue maximisation for rent-seeking behaviours, such as soliciting bribes, rather than fostering voluntary compliance. The KRA’s history supports these fears: in 2024 alone, 19 staff were dismissed for corruption. [iv]In 2025, the Kenya Revenue Authority (KRA) removed 475 officials from approving value-added tax (VAT) refund applications and flagged 4,434 traders.[v] Such practices reduce long-term revenue and distort market competition, as firms that comply honestly are penalized while those engaging in corruption flourish. These outcomes are consistent with what public choice theorists describe as “government failure”—when public institutions serve private interests at the expense of collective well-being.
Constitutional Infringements and Legal Overreach
Section 7 also contravenes several protections enshrined in the Constitution of Kenya 2010. Article 31 guarantees the right to privacy, shielding citizens from unwarranted searches and seizures. Yet Section 7 permits intrusive enforcement without judicial oversight, paving the way for overreach. Article 47 ensures fair administrative action; a standard compromised by the unchecked power to search and seize without due process. While Article 24 allows the limitation of rights in certain circumstances, such limitations must be reasonable and justifiable. Section 7 fails to meet this threshold due to its lack of safeguards and disproportionate nature.
Moreover, Article 243 of the Constitution reserves police powers for the National Police Service, subject to independent oversight. Empowering KRA officers with similar authority creates a quasi-police service that operates outside this framework, eroding the principle of separation of powers. From a public choice perspective, this represents a case where narrow, concentrated benefits—expanded authority for bureaucrats and political elites—are secured at the expense of broad, dispersed public costs: diminished rights, rising uncertainty, and reduced trust in public institutions. This dynamic persists due to rational ignorance, a concept in public choice theory explaining why citizens, faced with complex legal provisions, remain disengaged.[vi] The public becomes passive, lacking the time and expertise to scrutinize such laws, allowing self-interested policymakers to pass controversial reforms with minimal opposition.
Historical Lessons: Abuse and Selective Enforcement
Kenya’s history warns against granting unchecked power to state agencies. During the colonial era and subsequent authoritarian regimes, tax authorities were weaponized to suppress dissent and target political opponents. The 2010 Constitution sought to dismantle this legacy by establishing institutions grounded in accountability and the rule of law. Public choice theory explains how political elites can exploit such powers to punish opponents or reward allies, while the general public bears the hidden costs of weakened institutions and lost freedoms, which harm economic outcomes. Empirical evidence further supports the case against Section 7.
The KRA’s record of corruption is well-documented, and additional coercive powers are likely to exacerbate these problems rather than solve them. Internationally, many high-performing tax systems, such as those in Scandinavian countries, maintain effective enforcement through cooperation between revenue agencies and police, without compromising civil liberties.[vii] These models demonstrate that Kenya does not need to vest tax officers with police powers to achieve compliance.
Proponents of Section 7 argue that it enhances efficiency by reducing dependence on the police and streamlining tax enforcement. However, short-term gains will likely be outweighed by long-term harms: increased corruption, taxpayer alienation, and reduced compliance. Others claim the powers are necessary to raise revenue for essential services, but coercive enforcement often backfires, driving taxpayers into the informal economy or encouraging evasion. Article 24 may be invoked to justify these powers, but without proportionality and clear procedural safeguards, the justification fails under constitutional scrutiny.
Conclusion
Section 7 of the Tax Procedures Act is fundamentally flawed. It conflates distinct state functions, invites abuse, and undermines key constitutional and international safeguards. Public choice theory reveals how the provision serves narrow bureaucratic and political interests while imposing significant diffuse costs on ordinary taxpayers. Rather than fostering a culture of compliance, it fosters fear, uncertainty, and corruption. There is one medicine and one only; Repeal Section 7 of the Tax Procedures Act.
[i] Newkenyalaw. (2024). Tax Procedures Act. Kenyalaw.org. https://new.kenyalaw.org/akn/ke/act/2015/29/eng@2024-12-27
[ii] Shughart, W. (2013). Public Choice – Econlib. Econlib. https://www.econlib.org/library/Enc/PublicChoice.html
[iii] Stantcheva, S. (2017). Lecture 8: Public Goods. https://scholar.harvard.edu/files/stantcheva/files/lecture8.pdf
[iv] Muia, J. (2025, February 12). KRA fires 19 workers over corruption. Citizen Digital. https://www.citizen.digital/news/19-kra-staff-fired-over-corruption-n357507
[v] Odhiambo, A. (2025, May 12). Hundreds of KRA staff moved in tax fraud purge. Business Daily. https://www.businessdailyafrica.com/bd/economy/hundreds-of-kra-staff-moved-in-tax-fraud-purge-5038984
[vi] Dzenis, S. (2025). Public Choice Theory as an Explanatory Framework for PC. In Political Correctness in Academia: A Public Choice Analysis (pp. 77-127). Cham: Springer Nature Switzerland.
[vii] Rothstein, B., & Tannenberg, M. (2015). Making Development Work-The Quality of Government Approach. Available at SSRN 3023883.
Kenya has benefited from its relations with the world. Multilateral, plurilateral or bilateral relationships with other countries has increased Kenyan firms and individuals market access, peace cooperations, import sources and aid. Kenya has trade relations with the United State of America and the Islamic Republic of Iran. One of the most consequential relationships between the […]
The National Infrastructure Fund Act (No. 4 of 2026) took effect on 25 March 2026 with a headline financing target: to raise about Ksh 5 trillion over ten years for highways, railways, ports, energy, information and communications technology, water and irrigation. The plan works like this. Privatization proceeds become the Fund’s starting capital. That capital […]
Introduction The matatu metaphor can be used to analytically frame Kenya’s budget as a system that is subject to binding constraints, evolving expectations, and continuous adjustment to shocks. Like the matatu sector, fiscal policy reflects a balancing act between efficiency and quick action seeking to respond to public service delivery while constrained by competing sector […]
Introduction Imagine paying the same fare to travel at 6 a.m. as you would at 6 p.m., even though the matatu is half-empty in the morning and packed in the evening. At 6 a.m., there may be more seats available than passengers willing to pay for them. By 6 p.m., the situation is reversed. Hundreds […]
Absurd hypotheticals are useful precisely because they stress-test a system until its constraints become visible. This note asks what would break first if SpaceX, now a public company following its record-breaking Nasdaq debut in June 2026, with a post-IPO market value of approximately US$ 2.5 trillion, sought a secondary cross-listing on the Nairobi Securities Exchange. […]