Tax disputes arise when the taxpayer and the Kenya Revenue Authority (KRA) can’t agree on payable taxes, penalties, interests, and other tax issues. This dispute follows a tax audit or assessment by the KRA and a subsequent communication by the Commissioner to the taxpayer. How do you handle a tax dispute as a Kenyan taxpayer? The law provides four tax dispute resolution methods in Kenya. These include:
- Administrative decision
- Quasi-Judicial method using the Tax Appeals Tribunal
- Formal judicial process involving the High Court and the Court of Appeal
- Alternative dispute resolution (out-of-court settlement between the taxpayer and KRA)
During all these methods, you can improve your winning chances by working with a professional tax agent. The tax agent has industry knowledge and experience to interpret tax laws, develop the best strategies for your case, and negotiate a good resolution that favors you as a taxpayer. At Gichuri & Partners, we provide tax dispute resolution services in Kenya, helping individuals and businesses resolve tax disputes with KRA. We simplify the complex tax matters that arise in a dispute and help you get a fair and timely resolution.
Common Tax Disputes in Kenya
A tax dispute arises when KRA makes a tax decision, and the taxpayer raises an objection against this decision. Maybe the Commissioner ruled that you owe KRA an outrageous amount of taxes, unfair penalties, or interest. Below are the common tax disputes in Kenya:
- Unfair tax assessments
- Tax refund claims
- Tax evasion allegations
- Incorrect penalties and interests
- Misinterpreted tax laws
As a taxpayer, you need to approach a tax dispute with the best strategy to avoid losing to KRA, which may cunningly use tax laws to support their decision. A tax expert will help you interpret the ever-changing Kenyan tax laws and lodge a befitting objection.
KRA Tax Disputes Resolution Methods in Kenya
Tax disputes resolution in Kenya follows four levels, from the time the taxpayer disagrees with the KRA Commissioner’s administrative decision. These key levels are:
1. Objection, Review, and Decision
As a taxpayer, you can’t take KRA to court or other alternative dispute resolutions if they are unaware of your dissatisfaction. That’s why the Tax Procedures Act requires a taxpayer to lodge an objection with the KRA Commissioner within 30 days after getting the administrative decision by KRA. The Commissioner will review the objection and issue a decision within 60 days.
2. Appeal to the Tax Appeals Tribunal (TAT)
If you’re still dissatisfied with the objection decision in step 1, it’s time to move to step 2. This involves appealing the decision to the TAT, in accordance with the Tax Appeals Tribunal Act of 2013. However, only appealable decisions are allowed in the TAT. If you’re unsure whether your particular case is appealable, a tax consultant will help you figure it out.
3. Appeal to the High Court
The TAT Act of 2013 allows any party dissatisfied with the TAT judgment to appeal in a higher court. This court is the High Court of Kenya. This appeal must be filed within 30 days after receiving the TAT decision.
4. Appeal to the Court of Appeal
Both the taxpayer and KRA can appeal the High Court decision in the Court of Appeal within 30 days, as directed by the Tax Procedures Act. However, appeals to the High Court and Court of Appeal are based on dissatisfaction or a question of the law, and not any other aspect of the tax dispute.
5. Alternative Dispute Resolution (ADR)
Alternative Dispute Resolution involves resolving a tax dispute outside of the courts or tribunals. The KRA ADR framework allows the disputing parties to turn to ADR before they can escalate the matter to the judicial system. It also allows the replacement of the quasi-judicial process with the out-of-court negotiation. However, not all tax disputes can be resolved through ADR. Consult a tax expert to identify if your particular dispute is amenable to ADR.
Our Tax Disputes Resolution Services
We offer comprehensive KRA tax disputes resolution services to individuals and businesses. Our services include:
Tax Assessment Objection Services
We provide tax advisory services following a tax assessment to help you understand what’s best for you. Should you concede and pay the taxes and penalties, or object to the decision? If the latter is the best course of action, we will help you lodge the objection, stating the reasons for the objection and other relevant details.
TAT Services
Escalating a tax dispute to TAT allows taxpayers and KRA to reach a fair settlement. Our TAT services include:
- Assisting in writing a notice and memorandum of appeal
- Preparing and filing other relevant documents in the appeal
- Representing you as a taxpayer before the tribunal
- Offering post-tribunal support
ADR Services
We evaluate your case to determine if the alternative dispute resolution path is the best. Upon reaching this decision, we offer other supportive services, including developing a negotiation strategy, representation, compliance support, and post-ADR support.
Court Services
We help you prepare documents and lodge an appeal to the High Court or Court of Appeal within the statutory timelines. We also offer ongoing support and representation to ensure you’re well-informed of applicable tax laws.
Benefits of Engaging a Tax Agent in KRA Tax Dispute Resolution
Tax disputes come with high financial risks, especially where complex tax laws and strict timelines are involved. While it’s not mandatory to collaborate with a tax agent when handling these disputes, it’s encouraged. Just like hiring a lawyer in a legal case where self-representation is allowed, engaging a tax agent offers many benefits. These include:
- Expertise and Knowledge: Tax agents are trained tax experts with extensive knowledge in Kenya tax laws, resolution methods, and litigation. They can help you determine the best course of action following a tax dispute.
- Proper Documentation and Procedures: Tax dispute resolution follows intricate procedures and rules, including required documentation and filing deadlines. A tax consultant has handled such cases before and knows the required records and procedures.
- Skilled in Negotiation and Legal Proceedings: Whether you are using the ADR method or quasi-judicial litigation, these processes demand certain negotiation and representation skills. A tax agent can represent you, negotiate on your behalf, and advise on what to do and say.
- Saves Time and Money: Self-representation can cost you lots of money in case of delays, misinterpretation of laws leading to dismissal, and repeated mistakes. A tax agent knows the ins and outs of tax dispute resolutions and will simplify your case, saving you money and time, and giving you peace of mind.
Get Professional Assistance with Your KRA Tax Dispute
Resolving KRA tax disputes requires a combination of tax law knowledge, good strategy, experienced representation, and precision. At Gichuri & Partners, we embody all these qualities. We have helped hundreds of taxpayers resolve costly tax disputes with KRA, reaching a fair and amicable decision. Don’t risk costly mistakes and unnecessary delays? Let us handle your tax disputes so that you can focus on what matters and restore your peace of mind. Contact us today for the best KRA tax disputes resolution services in Kenya.
