Should the taxpayer still bear the burden of proof in instances where a tax dispute with the Revenue Authority is based in pre-populated & third party data? In my submission before the National Assembly's Finance & Planning Committee on behalf of the Tax Research Centre at @StrathU, I argue that Finance Bill 2026's proposals seeking to anchor Incomes & Expenses Validation in law will be incomplete if they do not include a proposal for the the Revenue Authority being saddled with the burden of proof in such instances. Here's why: · Finance Bill 2026 proposes to amend Sec75 of the Tax Procedures Act to provide that the Revenue Authority may use technology to pre-populate tax returns on behalf of a person required to submit or lodge a tax return · Finance Bill 2026 further proposes that a person required to submit or lodge a tax return may rely on pre-populated return generated by the Revenue Authority to file their return · Finance Bill 2026 proposes to amend Sec112 to provide that the Cabinet Secretary of the National Treasury may make Regulations for the procedure for the submission or lodging of returns based on pre-populated tax returns generated by the Revenue Authority Here's where the problem is: · In all this, Sec56(1) which provides that "In any proceedings, the burden shall be on the taxpayer to prove that a tax decision is incorrect" remains unchanged · Sec56(1) is predicated on the fact that Kenya has been running on a self-assessment based regime & the data upon which tax disputes emerges was held by the taxpayer · With Incomes & Expenses Validation & the onset of a Dual Assessment regime in Kenya, taxpayers are now exposed not just to errors of judgement & data on their part, but also errors of technology & transmission which are out of their control · Can we really still have the burden of proof lying exclusively with the taxpayer in an environment where tax compliance has shifted from a function of record keeping to one where system integration reliability is now a key factor?

What is happening with KRA? KRA audited Katahira & Engineers International Limited and raised a tax demand of 140M. Katahira went to court and won. The tax demand was killed. You would think that is the end KRA returned to Times Towers empty handed. Extremely angry. Swearing. Hiyo 140M haiwezi enda hivo. Aje? They hatched a plan. Ikaingiana perfectly. They deployed agency notices to NCBA and Stanbic banks. With stern instructions: - Freeze all Katahira accounts - Sweep the money and forward to KRA - Up to 140M Katahira directors woke up the next morning. As usual, chai ya kazini ndio hua inabamba. So they didn't take tea at home. At work, they tried to send money for tea. Accounts are frozen. They thought, KRA made an error to freeze our accounts. They served KRA and the banks with the court order that had already killed the tax. And asked them to unfreeze the accounts. KRA said they don’t want to see it. Wao wanataka tu 140M. Angry and with caffeine induced headache, Katahira ran to court again. The court could not believe it. It bashed KRA for disobedience of it's orders. And ordered the accounts to be unfrozen. They were unfrozen. Unfortunately, the court did not award legal costs to Katahira. What is happening at KRA? And who is accountable?