Globally, court litigations are normally tedious, lengthy and costly due to significant expenses devoted to pre-trial processes, such as written interrogatories and depositions of witnesses.
In courts, the judge’s decisions are constrained by statutory, case law and the conduct of the trial is governed by established rules of evidence.
Lack of concrete evidence may prolong the exercise resulting in interminable legal proceedings.
To provide an alternative method to the official judicial procedures in resolving disputes the Alternate Dispute Resolution was introduced.
The ADR is a process in which a neutral third party, a mediator or arbitrator helps parties who are embroiled in a dispute come to a consensus on their own by hammering out a resolution that is sustainable, voluntary and non-binding.
Locally, the use of the ADR mechanism in resolving disputes is anchored under Article 159(2) (c) of the Constitution of Kenya 2010.
One of the government agencies that has apparently continued to embrace the ADR in the interest of enhancing service delivery in the delivery of its mandate is the Kenya Revenue Authority.
KRA has embraced the use of ADR in resolving tax disputes since 2015 and has made incredible steps in this space.
In a press release on April 16 2021, the KRA Commissioner for Legal Services and Board Coordination stated that the taxman had collected over Sh21 billion from tax disputes resolved through the ADR framework.
In the process, KRA had resolved 393 tax disputes between July 2020 and March 2021.
ADR is fast and easy since the statutes provide timelines to which both parties must adhere. It is also less costly compared to court procedures.
In addition, the use of ADR is not only time and cost-effective but also preserves good future working relationships.
The ADR outcome is a win-win situation for the parties involved.
Given the aforementioned advantages, taxpayers in tax disputes with the taxman should consider the ADR process.
Edited by Kiilu Damaris
