This archive report was first published on 26 August 2020.
Kenya Revenue Authority Embraces Alternative Dispute Resolution ¶
Wednesday, August 26, 2020
As the world shifts towards finding amicable solutions to business disputes, the Kenya Revenue Authority (KRA) has taken a significant step by embracing Alternative Dispute Resolution (ADR) to settle tax disputes.
According to the KRA, the adoption of ADR has resulted in a 20% growth in ADR cases in the last financial year, with 284 tax disputes concluded through ADR in the FY 2019/20 compared to 237 in 2018/19.
The Authority has fully committed to ADR, offering facilitative approaches to solving disputes anchored in trust for enhanced compliance.
ADR has proven to be a win-win situation for both parties involved, with a resolution reached within 90 days as required by the Tax Procedures Act 2015. This time-saving approach has made ADR a preferred choice for taxpayers.
One of the key advantages of ADR is its cost-effectiveness, with no costs involved. Additionally, the flexibility and control of the matter at hand by both parties are guaranteed, allowing for a greater say in negotiations and control over the outcome.
ADR has also been found to be less formal, allowing parties to be more engaged than they would be in a court-driven process. The informality of mediation enables the mediator to focus the attention of the parties upon their needs and interests, resulting in faster resolution of cases.
Another significant advantage of ADR is confidentiality, which fast-tracks discussions and signing of agreements. The exponential growth in the number of tax dispute cases closed and the revenue yielded for the period the alternative has been operational is a testament to the effectiveness of ADR.
As the Commissioner for Legal Services and Board Coordination at KRA notes, the adoption of ADR has been a game-changer in building relationships between the taxman and taxpayers, resulting in improved compliance levels.
