This archive report was first published on 22 September 2019.
On September 22, 2019, the Kenya Revenue Authority (KRA) announced new rules aimed at curbing tax evasion and cheating. The new regulations restrict alternative dispute resolution (ADR) to tax-compliant cases only, effectively shutting the door on tax cheats seeking to have their cases settled out of court.
According to the draft regulations, a dispute shall not be eligible for ADR 'where the parties have not complied with the provisions of the relevant tax legislation and there is evidence that the non-compliance is consistent or deliberate.'
Under the new rules, only taxpayers who have complied with tax legislation and are willing to settle their disputes with KRA can access ADR services. The process is voluntary and requires the consent of both parties involved in the dispute.
These new regulations come as KRA Commissioner-General James Githii Mburu announced that the authority has identified individuals and corporations owing the Exchequer Sh250 billion through tax evasion in the past two years. The authority has served a number of firms with a cumulative tax bill of Sh116 billion, which is part of the quarter-trillion shillings in taxes they seek to recover.
Notable individuals and companies facing tax evasion charges include tycoon Humphrey Kariuki, who has been hit with a Sh41 billion tax bill, and the founders of Keroche Breweries, Mrs Tabitha Karanja and her husband Joseph Karanja, who are accused of evading Sh14.4 billion taxes.
These new regulations are part of KRA's efforts to recover taxes owed to the government and to curb tax evasion and cheating.
