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KRA loses power to control Tax Appeals Tribunal

Saturday August 21 2021
Kenya Revenue Authority

Kenya Revenue Authority headquarters in Kenya's capital Nairobi. PHOTO | FILE | NMG

By JAMES ANYANZWA

The Kenya Revenue Authority has lost the control of the tax dispute arbitration tribunal in a new law that seeks to ensure fair administration of justice in taxation disputes.

The National Assembly has introduced the Tax Appeals Tribunal (Amendment) Bill, which seeks to shift the Tax Appeals Tribunal from the Executive to the Judicial Service Commission to enhance its independence in the administration of justice and clear a backlog of 500 tax appeals.

The Parliamentary Committee on Finance and National Planning reviewed the Bill and recommended that the appointment and removal of staff of the tribunal, including its funding, be done by the JSC.

If the bill is passed, the tribunal will be funded under the Judiciary’s budget.

The bill proposes a membership of 15 to 20 to help deal with the backlog of appeals. Review of the Tax Appeals Tribunal Act (2013) comes after the Kenyan High Court ruled in March that local tribunals are subordinate courts and the appointment and removal of their members by the Executive violates the Principle of Separation of Powers, contravenes the right to fair hearing and infringes on the Independence of the Judiciary. The court directed that tribunals be transited to the Judiciary.

The Tax Appeals Tribunal (Amendment) Bill was published on May 5, 2021, went through the First Reading on June 8, 2021, and was forwarded to the Parliamentary Committee on Finance and Planning for review. The Bill which has 18 clauses seeks to amend the Tax Appeals Tribunal Act (2013) to address challenges affecting the performance of the Tax Appeals Tribunal to facilitate the expedition of tax disputes in Kenya.

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The Tax Appeals Tribunal is among the 34 tribunals that were to be regularised in compliance with the High Court judgment delivered on March 11 2021 in a petition by activist Okiya Omtata challenging the constitution, composition and operations of local tribunals in Kenya.

The petition sought a declaration that local tribunals are not part of the Executive, nor are they independent adjudicatory bodies, but are subordinate courts which are an integral part of the Judiciary.

As such the JSC should exclusively be responsible for appointing and removing members of the tribunals.

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