The Impact of taxation of illegal gain on the right against self-incrimination in Kenya

Abstract

This research examines the taxation of illicit income in Kenya and its impact on constitutional protection against self-incrimination. It examines the intersection of Kenyan tax legislation, specifically the Income Tax Act and Tax Procedures Act, with constitutional safeguards, identifying potential legal complications for taxpayers involved in unlawful activities. The study evaluates the risk of self-incrimination from mandatory income disclosure and taxation of illicit earnings and suggests the need for legal reforms. The research uses a doctrinal methodology, analyzing legislative texts, judicial rulings, and academic discussions. The results show a significant deficiency in protection against self-incrimination, with unclear immunity provisions and uncertainty regarding the deductibility of expenses associated with illegal income. The study recommends review of Sections 15 and 16 of the Income Tax Act to define permissible and impermissible deductions in cases involving illicit income and the revision of the section 97 Tax Procedures Act to introduce use and derivative use immunity for self-disclosed information modifications to the Income Tax Act and Tax Procedures Act to ensure uniformity in tax enforcement.