The authority is encouraging taxpayers facing disputed tax assessments and other disagreements to consider Alternative Dispute Resolution (ADR), a process that allows both sides to negotiate and seek an acceptable solution through dialogue.
In a communication shared on Thursday, November 12, KRA explained that the mechanism provides an opportunity for taxpayers to present their grievances and discuss disputed matters with the authority before committing to potentially expensive and time-consuming litigation.
The taxman described ADR as a faster, more affordable and confidential approach that encourages cooperation between the authority and taxpayers.
“Not every tax dispute needs a courtroom. Through Alternative Dispute Resolution (ADR), KRA and taxpayers can resolve eligible tax disputes through dialogue in a faster, more cost-effective and confidential process,” the authority stated.
KRA added that the process encourages collaboration and allows both parties to work towards mutually acceptable solutions without prolonged legal battles.
Taxpayers interested in using ADR are required to complete an application form and attach documents supporting their case.
According to KRA, applications can be submitted to the Tax Dispute Resolution Office at Ushuru Pension Towers, Block B, 7th Floor, in Upper Hill, Nairobi.
Alternatively, applicants can send scanned copies of the completed forms together with the relevant supporting documents through ADR@KRA.GO.KE.
The application must contain the taxpayer's personal or business details, information about the disputed tax matter, its current status and evidence relating to the disagreement.
Once an application is considered, the discussions involve three main parties: the taxpayer, the Commissioner or an appointed representative, and an independent facilitator who guides the negotiations.
The facilitator does not make a decision or force either side to accept particular terms. Instead, the role is to help both parties identify areas of agreement and work towards a settlement.
What happens after an application is submitted?
KRA expects participants to provide relevant information honestly, attend scheduled meetings and observe agreed timelines throughout the process.
Confidentiality is also an important part of the arrangement, allowing the taxpayer and the authority to discuss the disputed issues in a structured environment.
If an agreement is reached, the terms are recorded in a formal ADR agreement outlining what both parties have accepted.
However, participation is voluntary. Neither KRA nor the taxpayer can be compelled to enter the process or accept a settlement.
The authority also cautioned that any agreement reached must comply with the Constitution and existing tax laws.
Although ADR covers various tax disagreements, not every dispute can be resolved through the mechanism.
KRA's guidelines exclude cases where a proposed settlement would violate the Constitution, tax legislation or other applicable laws.
The process may also be unsuitable where a matter requires an authoritative interpretation of the law or where a court ruling would serve the wider public interest.
Disputes already covered by an undisputed court judgment or ruling are also excluded. Additionally, the process cannot proceed if either party is unwilling to participate.
Under Section 55 of the Tax Procedures Act, ADR proceedings are generally expected to be completed within 120 days. Where a court refers a matter for ADR, the applicable period depends on the directions issued by the court.
KRA's latest communication builds on a dispute resolution framework that the authority adopted for tax and customs matters in 2015.
The mechanism is supported by Article 159(2)(c) of the Constitution, which recognises alternative methods of resolving disputes, including mediation, reconciliation and arbitration.
It is also provided for under Section 55 of the Tax Procedures Act, 2015, and Section 28 of the Tax Appeals Tribunal Act, 2013.
ADR complements the existing tax dispute process, where a taxpayer can first object to a decision made by the Commissioner before taking the matter to the Tax Appeals Tribunal or the courts.
KRA has previously explained that the arrangement helps reduce litigation expenses, ease the backlog of unresolved disputes and maintain working relationships between taxpayers and the authority.
The authority has also indicated that the ADR process itself is free of charge, although taxpayers who hire lawyers or other professional advisers may incur additional expenses.
For Kenyans who disagree with tax assessments or other decisions made by the taxman, the option provides another route to pursue a settlement without immediately resorting to court action, provided the dispute qualifies and both parties are willing to participate.
https://www.facebook.com/100063646850476/posts/1744088381056040/?app=fbl
Leave a Reply