Treasury wants special tax court established

The National Treasury has pushed for the establishment of a specialized tax court to enhance tax administration in the country.

The proposal is part of the draft National Tax Policy published this week by the exchequer.

At the same time, the Treasury wants the delinking of the Alternative Tax Dispute Resolution under the Tax Appeals Tribunal (TAT) from the Kenya Revenue Authority (KRA).

The push to have a special court to handle tax matters is even as the exchequer remains in full praise of the Alternative Dispute Resolution (ADR) mechanism which has reduced the cost and time for tax dispute resolutions.

Across the 2020-2021 financial year, the number of out of court or out of tax appeals tribunal mechanism cases stood at 552.

About 64 per cent of suitable disputes were handled via the mechanism, realizing revenues of Ksh.31.4 billion for the taxman and the Treasury.

Currently, key players in tax administration include KRA, the National Treasury, the National Assembly, the Judiciary and the Tax Appeals Tribunal (TAT).

The Tax Appeals Tribunal hears and determines tax disputes between the KRA Commissioner and taxpayers while the Judiciary has so far facilitated the settlement of tax disputes between KRA and taxpayers.

While the National Treasury has not provided further details to the creation and operation of the specialized tax court, the move could be a reversal of policy from leveraging the power of the ADR process.