“The quality of our lives depends not on whether or not we have conflicts, but on how we respond to them.” These are words of Thomas Crum, a famous author of conflict resolution. At any given point of dispute; avoiding, defeating, compromising, accommodating, and collaborating are the most commonly used methods in resolving conflicts in day-to day life.

Kenya Revenue Authority (KRA) has been on the forefront in propelling national development through efficient and sustainable revenue administration. In efforts of implementing taxpayer focused model, KRA introduced Alternative Dispute Resolution (ADR) in 2015. The model adopted internal dispute resolution instead of using courts to settle tax disputes between KRA and taxpayers. ADR is free of charge, and a facilitative and confidential process, hence being one of most economical models geared towards arriving at tax agreements in dispute.

As a beneficial approach, it gives taxpayer a well-suited mode of tax dispute resolution. It also saves on cost when compared to judicial and quasi-judicial processes that involve technical procedures, ultimate decisions and costs of litigation. ADR takes 90 days maximum as guided by Tax Procedures Act 2015. The parties to the dispute (the taxpayer and the Commissioner) are directly involved in arriving at an amicable settlement with an assigned ADR facilitator who facilitates communication, manages the meetings and is in charge of the proceedings.

In addition to achieving a win-win outcome, KRA maintains her relationship with the taxpayer thus enhancing service delivery. Being in the form of facilitated mediation and not arbitration as envisaged in the Arbitration Act; Cap 49 Laws of Kenya, the facilitator has no power to impose any decisions regarding the outcome of the tax dispute. In this regard, the parties are facilitated to finding a solution to the dispute.

ADR has been promising since its adoption, registering significant growth year on year. ADR facilitated resolution of 552 cases in the just concluded financial year 2020/2021, from 284 cases concluded in the previous financial year 2019/2020. This marked a 194% growth in the number of cases. ADR also released revenue of 31.4 Billion in the last financial year registering a growth of 328% from the previous financial year (2019/2020) in which 9.5B was released.

KRA encourages taxpayers with disputes in Income Tax, Customs duty, Value added Tax and Excise Duty to consider Alternative Dispute Resolution. Taxpayers interested in applying for ADR can download the form through this link. Alternative Dispute Resolution (ADR)is one of the forerunners in promoting tax compliance; a pillar in achieving revenue targets while maintaining and building relationships. Efforts are being made to increase awareness through various sensitization programs in KRA. Notable increase in the number of cases and revenue collected through ADR highlights its efficiency in resolving disputes in revenue collection and administration. ADR has exemplified trust and Customer focused tax administration which is our organisational vision in offering quality taxpayer service.

By Antony Maingi

KRA Tax Education