Agency given 3 months to end tax disputes

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A Kenya Revenue Authority employee helps a client file tax returns at the Nyeri region office on June 29 this year. President Uhuru Kenyatta has urged the taxman to pursue alternative dispute resolution mechanisms to settle tax disputes. [Kibata Kihu, Standard]

President Uhuru Kenyatta has given the Tax Appeals Tribunal three months to resolve the disputes between taxpayers and the Kenya Revenue Authority (KRA).  

Resolving the disputes could unlock billions of shillings in tax revenues for the government, which is under pressure to increase tax collections to bridge a widening Budget deficit.

President Kenyatta yesterday directed the tribunal to report back within 100 days on the progress in resolving the numerous cases before it.

He noted that there are more than 1,000 cases and Sh300 billion in disputed tax that have been pending before the tribunal, as well as the courts, for more than two years, which he said “represented a significant bottleneck in the tax administration process”.

“We have a new Tax Appeals Tribunal, and I want a report from you within three months on what you have done to expedite those cases, failure to which, as I have always reminded each civil servant, hakuna shida, Wakenya ni wengi ambao wanangojea hizo kazi (there are many Kenyans waiting for these jobs) … three months, my friends, and we want it done,” said Uhuru.

The President spoke at the Taxpayers’ Day hosted by KRA in Nairobi.

He also urged the courts to expedite tax cases, while taking a swipe at Chief Justice David Maraga, who on Monday told off the Executive over budget cuts to the Judiciary.

Fear or favour

Uhuru said the judiciary could expedite the cases if “it so desires”.

“I call on the Judiciary ... to strive to determine expeditiously tax disputes without fear or favour. Both the taxpayer and tax authority deserve quick and efficient hearing to know the outcome of their cases as soon as possible,” he said.

The President at the same time challenged KRA to at times use “soft power” in ensuring tax compliance, noting that not all businesses or individuals are criminals.

He urged the taxman to take up alternative dispute resolution mechanisms instead of engaging in never-ending court battles with some taxpayers, especially those who have a good track record.

“Where the taxpayer has not knowingly engaged in tax evasion or other criminal conduct, and where the taxpayer has demonstrable prior record of good tax compliance … it might be better for KRA to meet the taxpayer part of the way and deliver immediate tax collections rather than wait for an outcome of a lengthy and adversarial process that may be subject to further lengthy appeals,” said Uhuru.

The President, however, asked the relevant authorities to go after those helping people evade taxes.

“Professional advisors and facilitators of tax evasion will also come into focus and face prosecution,” he said.