KRA rejects MPs’ proposal on tax appeals tribunal


The Kenya Revenue Authority (KRA) has rejected argument by lawmakers that maintaining tax appeals tribunal under the National Treasury will compromise its independence.

A National Assembly’s committee earlier in August shot down proposals in the Tax Appeals Tribunal Amendment Bill 2021 to maintain the hiring and remuneration functions of the tribunal under the Treasury.

The Committee on Finance and National Planning said such a move would compromise the tribunal’s independence and maintained that its staff, budget, and remuneration be handled by the Judicial Service Commission (JSC).

“Anybody who is saying the tribunal is not independent because the appointment of the members and the chairman is done by the executive is not saying the truth because I would say the same of the Judiciary where the judges are appointed by the president. That’s just a perception,” KRA Commissioner for Legal Services Paul Matuku told the Business Daily.

The State-backed Tax Appeals Tribunal Amendment Bill 2021 was brought to Parliament after a court ruled in favour of activist Okiya Omtata to move the appointment of tribunals from the Executive to the Judiciary as provided for in the Constitution.

Operations at the tribunal were in 2018 grounded after the contract of members expired with then Treasury secretary Henry Rotich delaying naming the new team for nearly a year, until April 2019.

The tribunal concluded 1,127 tax disputes for the financial year ended June 2021, a jump of 78.89 percent compared with 630 cases a year earlier, according the taxman.

About 90 percent of the cases were ruled in favour of the KRA, Mr Matuku said without disclosing the amount of revenue which was unlocked.

“We have made our presentation to the concerned parliamentary committee through our parent ministry, the Treasury. They will be considered amongst other submissions and the person who has to make the decision will do so based on the submissions,” Mr Matuku said.

“My expectation is to have an independent and vibrant tribunal like we are having currently regardless of where it’s housed.”

The Tax Appeals Tribunal Act was enforced in 2013 as part of business reforms aimed at boosting the investment climate.

The tax arbitration process was previously governed by various tax statutes with resultant tribunals being funded by the KRA, raising perception of lack of independence.