Kenya Revenue Authority’s out of court negotiations recorded a 31 per cent growth, resolving 319 cases in the first quarter of the 2021/2022 financial year compared to 243 same period last year.
KRA collected Sh10.493 billion through the Alternative Dispute Resolution compared to Sh9.447 billion collected during a similar period in the Financial Year 2020/2021.
KRA Commissioner legal services Paul Matuku on Monday said the ADR has seen the average time taken to resolve tax disputes drop by more that 50 per cent from 90 to 42 days.
“This represented a higher level of efficiency compared to the time taken to resolve a tax dispute in an adversarial process, which often spans years,” Matuku said in a statement.
KRA received 559 out of court tax disputes applications between July and December 2021 compared to 493 cases received in 2020, a 13 per cent growth.
The tax agency attributed the growth in the number of applications to ADR to the increase in the number of taxpayers embracing out of court negotiations.
According to the Tax Procedures Act, cases under discussion outside of the Tax Appeals Tribunal or Courts should be resolved within 90 days.
This provision ensures that disputes are resolved expeditiously and not inordinately delayed. Notwithstanding the legal provision for resolution of tax disputes within 90 days, cases can and have previously been settled in considerably less time through the ADR process.
KRA has encouraged taxpayers to utilise the ADR process-initiated in 2015-in resolving tax disputes because of flexibility, cost-efficiency, confidentiality and time-consciousness.
“Through structured discussions and settlement processes at ADR, more disputes are resolved efficiently and with greater satisfaction to all parties. The process has also enabled the tax administration to foster good relationships with taxpayers and enhance tax compliance going forward,” the KRA legal team said.
Kenya Revenue Authority is keen on putting in place measures to tap more revenues and meet its financial year obligations in supporting the government’s annual spendings.
The tax body said it collected Sh976.7 billion in the first half of the 2021/22 financial year which was against a target of Sh929.1 billion.
“Patriotic taxpayers keen on facilitating national development allowed KRA to collect a surplus of 47.532 billion,” Commissioner-General Githii Mburu said in January.
KRA also surpassed both its exchequer revenue and overall revenue targets in the last five months (From August to December).
Data from the Exchequer contained in a January Kenya Gazette shows that KRA collected Sh1.01 trillion between July 2021 and January 2022 compared to Sh779.3 billion in the same period of 2021.
The authority remains keen on hitting its current annual financial year targets after surpassing the Sh1.652 trillion target for 2020/2021 with a surplus of Sh16.81 billion.
KRA is focused on hitting the Sh1.78 trillion target.
