Tax Appeals Tribunal directed to deal with Sh300 billion tax disputes within 100 days

The Tax Appeals Tribunal has been given three months within which it must resolve the disputes between tax payers and the Kenya Revenue Authority. Resolving the disputes could unlock billions in tax revenues for the Government, which is at pains to increase tax collections to meet growing budgetary needs.

President Uhuru Kenyatta on Tuesday directed the tribunal to report back within 100 days on the work that it will have done in resolving the numerous cases before it. The President noted that there over 1,000 cases and Sh300 billion in disputed tax had been pending before the tribunal as well as courts for more than two years and that it “represented a significant bottleneck in the tax administration process”.

“We have a new Tax Appeals Tribunal and I want a report from you within three months on what you have done to expedite those cases failure to which, as I have always reminded each civil servant, hakuna shida, wakenya ni wengi ambao wanangojea hizo kazi (there are many Kenyans who can get the job done) … three months my friends and we want it done,” said a stern Uhuru.

The President also urged the courts to deal with tax cases with speed but not without taking a swipe at Chief Justice David Maraga, who Monday had an outburst following the budget cuts on the judiciary. Uhuru said the judiciary could expedite the cases if ‘it so desires’.

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“I call on the judiciary, if they so desire, to strive to determine expeditiously tax disputes without fear or favour. Both the tax payer and tax authority deserve quick and efficient hearing so that to know the outcome of their cases as soon as possible,” he said.

President Kenyatta, who presided over the Taxpayers’ Day hosted by the Kenya Revenue Authority, also challenged KRA to at times use soft power in getting taxpayers to remit taxes, noting that not all businesses or individuals are criminals, though aggressive push by tax and law enforcement authorities has project them as outright tax evaders.

The president said KRA should take up alternative dispute resolution instead of engaging in never-ending court battels with some taxpayers, especially those that have a good track record.

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“Where the tax payer has not knowingly engaged in tax evasion or other criminal conduct and where the tax payer has demonstrable prior record of good tax compliance… it might be better for KRA to meet the taxpayer part of the way and deliver immediate tax collections rather than wait for an outcome of a lengthy and adversarial process that may be subject to further lengthy appeals,” he said.

“You must not make every business criminal when they are not… we know the criminals. Where we can sit and discuss, let us sit and discuss, find solutions and allow businesses to continue with their activities. Where there has been tax evasion or other criminal conduction, DPP and the DCI, do your work because the law must follow its natural course.”

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In addition to the prosecution of firms and individuals that evade taxes, the President also wants the tax and law enforcement agencies to go after professionals that aid in the vice.

“Professional advisors and facilitators of tax evasion will also come into focus and face prosecution. Tax evasion will and must be fought on all fronts. My call therefore is on all taxpayers to come forward and regularise their tax positions rather than await the coming storm,”

“KRA must be empowered to impose greater accountability in terms of fines and liability for taxes with respect to professional advisors and agents who provide assistance for or enable deliberate non-payment and a draft bill will be placed before cabinet within 120 days, from today.”

President Uhuru also directed National Treasury to review the KRA Act and increase incentives to whistle-blowers that give credible information to the tax collector.

“We are particularly keen on whistle-blowers who are able to give the necessary authorities accurate and compelling information that yields additional tax collections. I direct the National Treasury to re-examine the reward system contained in the KRA Act with a view to significantly enhance it and empower KRA to boost further the receipt on actionable intelligence on tax evaders,” he said.

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The President decried the view held by many Kenyans, where many of them want to beat the tax authorities and evade paying taxes.

He directed Treasury and the Office of the Attorney General to review the law and recommend how the tax authority can be equipped with ‘greater powers’ to increase compliance with tax laws. The President also wants provisions of KRA Act that empower authorised KRA officer to exercise powers similar to those of police operationalised.

“For far too long, tax evasion, unfortunately, has been glorified in Kenya. Far too many Kenyans feel justified to cheat their fellow Kenyans in paying less that they should into public coffers.

Yet despite this behaviour, the same people expect world class road, uality healthcare, education and other public services, not appreciating the fact that these public goods and services are paid for out of tax revenues. This situation is untenable and will not be allowed to continue,” he said, adding that there will be a review of the law to empower KRA.  

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KRATaxTaxpayersPresident Uhuru KenyattaTax evasionTax Appeals Tribunal Tax Appeals Tribunal