Posted August 27, 2020 1:28 pm by

In a quiet revolution against the traditional practice of enforcement, taxmen globally are now showing serious interest in finding ways to resolve business disputes without going to trial.

Kenya Revenue Authority (KRA) has not been left behind in this revolution and is indeed among the bodies that have embraced Alternative Dispute Resolution (ADR) as a means of settling tax disputes. This has resulted in KRA experiencing a 20 per cent growth in ADR in the last financial year, a sign that trust and facilitation is now at the centre stage of dispute resolution in tax matters.

Majority of taxpayers facing disputes with KRA, are now adopting amicable ways of settling their disputes out of court and this is evidenced by the rising number of cases concluded by way of ADR; with 284 tax disputes concluded in the FY 2019/20 compared to 237 concluded in 2018/19.

The Authority has fully embraced ADR, offering facilitative approaches of solving disputes anchored on the fulcrum of trust for enhanced compliance. This new approach to solving disputes is more rewarding to the parties involved since there is a win-win situation.

In resolving disputes, KRA employs the facilitated mediation type of ADR where a neutral mediator assists the parties to reach an amicable solution or settlement. All tax disputes qualify to be resolved through ADR apart from those arising from the interpretation of the Constitution and criminal cases of tax evasion.

KRA’s decision to introduce ADR in 2015 was informed by the need to address the burgeoning backlog of tax disputes that were pending at the Tax Appeals Tribunal (TAT) and at the courts. It was found that traditional means of resolving disputes through litigation brought with them a fair share of challenges among them low compliance, high litigation costs and strained relations between KRA and the taxpayers.

Although ADR’s reception at the inception stages was quite low, the framework is fast gaining traction in the country. The growing number of applications over the past few years point to a future where ADR will be the most preferred avenue for settling tax disputes.

Apart from providing a platform for better relations between KRA and the taxpayers, ADR acts as a key revenue enhancement measure. Since inception, ADR has seen KRA successfully emancipated revenue trapped in tax disputes at a faster rate. In the just ended financial year, ADR realised revenue of KShs. 9.561 Billion compared to 2018/2019 where the revenue realised was KShs. Read More…Alternative dispute resolution is the way to go in resolving tax disputes  Alternative dispute resolution is the way to go in resolving tax disputes  Alternative dispute resolution is the way to go in resolving tax disputes  Alternative dispute resolution is the way to go in resolving tax disputes