Companies

KRA urges firms to move away from courts in tax disputes

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Times Tower. FILE PHOTO | NMG

The Kenya Revenue Authority (KRA) has called on businesses and individuals to embrace alternative dispute resolution as a way of resolving disputes with the taxman, rather than turning to law and quasi-judicial processes such as the tax tribunal.

KRA Deputy Commissioner Rispah Simiyu told the Business Daily that the agency’s ADR unit, established in 2015, had handled 404 cases by the end of March 2019.

“Through this, as we continue to transform, we are looking at better ways of resolving disputes that are arising in the course of taxpayers carrying out business. As we all appreciate, whenever there is a commercial transaction, there is a likelihood that a dispute could arise… We all read from revenue laws but even as we read from the same laws, we may have different interpretations resulting in disputes.

“It is as a result of this that we try to manage them internally,” said Ms Simiyu.

“We are calling on our taxpayers to sit around the table and engage the assessing commissioner as we act as the neutral party…If the business department (Customs or Domestic taxes) assesses a taxpayer who feels aggrieved, it is important that a different party within KRA looks at it from a different lens and perhaps may have a different result.”

unsuccessfully lobbying

According to the taxman, the unit successfully closed 90 cases last year and as at the end of last month, the number went up to hit 174 cases.

The KRA’s alternative dispute resolution division was established after years of unsuccessfully lobbying the Judiciary to create a special division for tax cases, the same way it has for children, crime, land, labour, Constitution and commercial disputes.

It also came at a time when the KRA said it wanted a unit to hear and conclude cases internally instead of subjecting suspected tax cheats to a “damaging public trial”.

Several groups, including the private sector lobbies, had raised concern over the backlog of tax cases filed in ordinary courts.