The Kenya Revenue Authority (KRA) formulated the Alternative Dispute Resolution (ADR) to help taxpayers solve tax disagreements outside of law courts, the Tax Appeals Tribunal and the Quasi-Judicial process.
To apply for the ADR, one is required to download the application form from KRA’s website www.kra.go.ke
“Where the space provided is insufficient please make use of an extension page and attach it to this application form. Pages attached must be sequentially numbered and the total number thereof must be stated in the field provided,” the application form instructs.
The completed form and attachments are then delivered to the Tax Dispute Resolution office at Ushuru Pension Towers on Elgon Road Upperhill in Nairobi.
Role of Parties/What is required of them
The process which involves three parties - the taxpayer, the commissioner and the facilitator - requires that they all attend scheduled meetings diligently.
The parties involved in the resolution are required to uphold and maintain courtesy and keep the process and information discussed confidential. Further, parties are advised to participate in all discussions fairly and diligently.
Make full disclosure of material facts relevant to the Tax dispute. This is to ensure that the process is fair and credible based on the information in documents and other materials tabled before the resolution meeting.
Strict adherence to the agreed timelines as in court-initiated ADR, or as per the Tax Procedure Act (TPA) section 55 which allows up to 90 days from the discovery of the issue to file for an ADR.
Disputes appropriate for ADR
Disputes that can be solved through the ADR system include one in which the tax assessment has not been confirmed, or if the tax assessment has been confirmed but the parties mutually agree to a self-review and disputes already filed in a court but the parties request for an out-of-court settlement.
Exceptions;
The ADR system does not apply to settlements that are contrary to the Constitution, the Revenue Laws or any other enabling Laws.
In instances where the matter borders on a technical interpretation of the law or is in the public interest to have judicial clarification on the issue, alternative methods or resolution out of court cannot be applied.
In addition, a scenario is excluded from an ADR system if one of the parties involved rejects the process of resolution, or if there is evidence of pending court judgements and rulings in the matter.
