Tax Disputes Resolution in Kenya: Viability of Including Alternative Dispute Resolution Mechanisms

Abstract

This study evaluates ADR as a potential alternative for resolving tax disputes in Kenya. It traces the historical development of tax disputes resolution approaches since independence and considers their shortcomings in terms of time, cost effectiveness and taxpayer satisfaction. It evaluates the current constitutional dispensation as well as recent tax legislative reforms and analyses the viability of inclusion of ADR as well as its potential benefits from a tax perspective. It critically looks at the ADR Framework proposed by KRA and considers the constitutional, legal, policy and administrative challenges that bedevil it. The study draws the conclusion that use of ADR in tax dispute resolution is a viable proposition. Drawing from lessons from commonwealth jurisdictions that have experimented with ADR, the study proceeds to make recommendations that will improve the viability of inclusion of ADR mechanisms in tax dispute resolution in Kenya.