OUT OF COURT

KRA says recorded 100% growth in tax dispute resolution

Last year, the division collected Sh25.8 billion from 652 disputes it had with taxpayers in and out of court

In Summary
  • It cleared 118 cases in the first three months of the year compared to 59 the same time last year.
  • The average time taken to resolve tax disputes dropped to 23 day
The KRA headquarters at the Times Towers.
The KRA headquarters at the Times Towers.
Image: FILE

Kenya Revenue Authority’s (KRA) Alternative Disputes Resolution (ADR) recorded 100 per cent growth, resolving 118 cases in the first three months of the year compared to 59 same time last year.

In a statement, the tax agency’s legal department said the average time taken to resolve tax disputes equally dropped to 23 days  from an average of 60 last year.

The Tax Procedures Act provides that disputes under the ADR framework should be resolved within 90 days.

 

KRA received 408 disputes between March to September 2020 at ADR, compared to 310 case during the same period in 2019.

The authority is expected to double the amount collected through the division, which was formed in the year 2015 even as it works towards raising Sh1.46 trillion this fiscal year.

Last year, the division collected Sh25.8 billion from 652 disputes it had with taxpayers in and out of court.

“This not only represents an excellent performance but also confirms that taxpayers have embraced ADR as opposed to other dispute resolution mechanisms such as litigation processes,’’ KRA commissioner for legal services Paul Matuku said.

ADR does not require payment of legal and court filing fees. A taxpayer also does not require the presence of an advocate, hence cutting costs.

Latest National Treasury data shows the tax agency collected Sh575.9 billion between March and July; an 11 per cent drop compared to Sh647.4 billion similar period last year.

The performance was weighed down by Covis-19 that has disrupted social-economic activities.

 

KRA, which has been missing its tax targets for the past five years, has adopted a softer revenue collection model and seems to be reaping dividends.

It recorded a 1.7 per cent jump in revenue collection for the financial year 2019/20 despite Covid-19 economic effects eating into collections in the last quarter.

According to Treasury, revenue collection for the year ended June 30 reached a new high of Sh1.607 trillion, compared to Sh1.580 trillion collected in the previous financial year.

This represented a performance rate of 97.9 per cent compared to the previous financial year.