BOOST AS KENYA REVENUE AUTHORITY COLLECTS 21B

KRA collects KShs 21B from Alternative Disputes Resolution

 

By Donald Kogai

 

The Kenya Revenue Authority (KRA) has collected over KShs 21

billion from its Alternative Disputes Resolution (ADR) mechanism.

This is after KRA resolved 393 ADR cases this financial year (July

2020 to March 2021).

 

The ADR mechanism which was implemented by KRA in 2015 has

seen significant growth in terms of the number of cases resolved

and the revenue unlocked. This positive trajectory is marked by a

109% growth in the number of cases and 389% growth in revenue

unlocked this financial year 2020/2021 (July 2020-March 2021) when

compared to a similar period last financial year 2019/2020.

 

 

The Tax Procedures Act provides that under the ADR framework,

disputes should be resolved within 90 days. This is to ensure that

disputes are resolved in an expeditious and timeous manner.

Although the law allows for 90 days, resolution of cases under ADR

can be achieved in a much shorter time span.

 

 

Unlike other dispute resolution mechanisms, ADR is pocket friendly

as it does not require payment of any filing fees. It is a mediation

process in which a taxpayer can opt to represent himself without

the need for an Advocate or a tax representative.

 

 

Despite the current Covid-19 pandemic related challenges,

resolution of disputes through ADR has remained unhampered as

meetings are conducted virtually. This has further reduced the time

within which the meetings are held. The average time taken to

resolve ADR cases has been reduced from 89 days in Financial Year

2019/2020 to 42 days in the current financial year 2020/2021.

 

 

The ADR process preserves the relationship between the taxpayer

and the Authority. The mediator ensures that parties are not

antagonized and maintains cordial relationships. The process

provides a win-win outcome for the parties which leaves both

parties happy with the outcome and prevents the further escalation

of disputes. A good example of this is when a taxpayer is allowed to

present documents for verification under ADR, which documents

would otherwise be rejected in a Tribunal or Court hearing in strict

adherence to the law governing admission of evidence.

 

 

Taxpayers have embraced ADR and this is evidenced by the

increasing number of ADR applications being received by KRA. In

the current financial year, KRA recorded a 56% growth in the

number of ADR applications from 425 received in the financial year

2019/2020 to 661

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