Kenya Revenue Authority (KRA) facilitated the collection of Sh86.518 billion through its Tax Dispute Resolution program.
This is an increase from the Sh21.9 billion that was realised in the 2023-2024 financial year.
The Authority utilises Independent Review of Objections, their Alternative Dispute Resolution (ADR) mechanism and Litigation, resulting in significantly enhanced revenue collection.
During the period review, Sh18.898 billion was released for collection through KRA’s alternative dispute resolution mechanism, while Sh67.620 billion was released for collection as a result of 2,389 successful outcomes in the courts.
The taxman says through its Independent Review of Objections Section, KRA undertook independent reviews of 3,594 objection cases as part of its broader Tax Dispute Resolution framework.
These reviews aim to prevent escalation into litigation processes which can be lengthy and costly to the parties.
“Furthermore, during the financial year, KRA concluded 1,152 cases through its ADR mechanism. This outstanding performance demonstrates that Taxpayers have embraced the Tax Dispute Resolution programme, particularly ADR, which continues to gain preference as a method for resolving tax disputes,” read a statement from KRA
The taxman says that being a voluntary and participatory process, it allows parties not only to choose the forum but also to control the process.
It is also less formal than court proceedings, offering greater flexibility. In addition, ADR is confidential, cost-effective, and often results in quicker settlements.
“KRA urges all parties involved in tax disputes to consider ADR as a viable, cost-effective and efficient resolution mechanism. Additionally, KRA encourages Taxpayers to remain compliant to avoid future disputes,”
Kenya first ushered in ADR in April 2015 with the Tax Procedures Act, No. 29 of 2015, paving the way for the resolution of tax disputes between the Commissioner and taxpayers outside the traditional court systems.
The process was instituted as an alternative to the legal mechanism under the Tax Appeals Tribunal Act, 2013 which was enforced as part of the business reforms aimed at boosting the country’s investment climate.
Some of these methods include mediation, arbitration, and negotiation.