Tax AlertTax Appeals Tribunal Reconstituted

IntroductionThe Cabinet Secretary for the National Treasury and Planning (“the CS”) has reconstituted the Tax Appeals Tribunal (“TAT”, “the Tribunal”) through a Gazette Notice issued on 15 April 2019.

The TAT was first constituted on 1 April 2015 with the inaugural members of the TAT serving three-year terms that expired in April 2018. There have been no hearings of tax disputes by the TAT since April 2018, as the CS had not appointed new members of the TAT.

In the intervening period, the TAT registry has remained open for filing of new tax appeals whereas the Chairperson of the TAT, whose tenure expires on 1 April 2020, has been overseeing mentions of tax disputes.

However, the Chairperson sitting alone lacks powers to hear and determine disputes,

April 2019

Get in touch

Simeon CheruiyotPartnersimeon.cheruiyot@pwc.com+254 20 285 5000

Wangui MwanikiSenior ManagerHead, Tax Controversy & Dispute Resolutionwangui.mwaniki@pwc.com+254 20 285 5811

Edna GitachuSenior Manageredna.gitachu@pwc.com+254 20 285 5429

Elly ObegiAssociateelly.obegi@pwc.com+254 20 285 5244

resulting in a backlog of disputes before the TAT. The reconstitution of the TAT is a welcome relief for taxpayers who can take advantage of the newly reconstituted TAT to expedite the resolution of tax disputes.

The Tribunal The Tax Appeals Tribunal Act empowers the TAT to hear and determine tax disputes arising under any tax law in Kenya. The TAT is the primary forum for aggrieved taxpayers to seek redress for/against the decisions of the Kenya Revenue Authority.

Taxpayers are required to lodge their disputes at the TAT before the disputes can be brought before the High Court by way of appeal. The TAT is guided by less formal rules of procedure intended to result in comparatively simpler and more efficient disposal of tax disputes than proceedings before courts.

Next stepsThe Chief Registrar of the Judiciary must swear in the 18 newly appointed members of the TAT before they can assume office as TAT members. The TAT Act does not provide any timelines for the swearing in of a TAT member. However, we expect this to be done in about a month’s time in keeping with the timelines adopted during the inaugural constitution of the TAT in 2015.

Thereafter, the Chairperson of the TAT shall constitute panels of at least three members to hear various tax disputes. We expect that the Chairperson of the TAT will give priority to disputes which had been partly heard or which were pending judgment by the TAT before expiry of the previous term. Taxpayers with pending disputes at the TAT should expect to receive hearing notices from the TAT once the new members of the Tribunal are sworn in.

TakeawayWe hope that the reconstitution of the TAT will prompt speedier resolution of tax disputes before the TAT and aid in clearing the backlog of pending disputes.

This publication has been prepared as general information on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice.

© 2019 PricewaterhouseCoopers Limited. All rights reserved. In this document, “PwC” refers to PricewaterhouseCoopers Limited which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.

In order to prevent a repeat of the year long period of inactivity by the TAT, the Government of Kenya should fast track the passage of the Tribunals Bill, 2018 which proposes to introduce a three month deadline for the appointment of tribunal members once a vacancy in the office of member of a tribunal arises.

How we can helpAt PwC, our Tax Controversy and Dispute Resolution (“TCDR”) team offers end-to-end dispute resolution services.

Our team of lawyers and tax advisors is experienced in representing clients at the TAT and offering support during proceedings under the Alternative Dispute Resolution Framework. Our team is able to support you with every aspect of tax disputes with the KRA through to resolution.

ConclusionFor further information on this tax alert or any assistance with tax disputes please contact any of the people listed herein or your usual PwC contact.