Taxpayers who disagree with a tax assessment or decision by the Kenya Revenue Authority (KRA) do not necessarily have to resort to lengthy court battles to resolve the matter.
In an update on Friday, August 14, KRA highlighted Alternative Dispute Resolution (ADR) as an option that allows taxpayers and the tax authority to settle disputes through dialogue and collaboration, potentially saving time, money and business relationships.
KRA explained that ADR provides an alternative to the conventional judicial process, allowing both parties to engage in facilitated discussions outside the Tax Appeals Tribunal or courts.
"Alternative Dispute Resolution (ADR) offers taxpayers and the Kenya Revenue Authority (KRA) an opportunity to resolve tax disputes through open dialogue, collaboration, and mutual understanding outside of the courts," the authority said.
KRA said the process is intended to help taxpayers and KRA arrive at practical solutions while avoiding some of the financial and operational burdens associated with litigation.
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"It is designed to help both parties find practical solutions while saving time, money, and valuable business relationships," the authority added.
According to KRA, under ADR, a taxpayer, the Commissioner and an independent facilitator participate in discussions aimed at resolving the dispute.
The facilitator does not determine which party is right or wrong but guides the discussions and encourages constructive engagement.
The process is voluntary and is designed as mediation rather than arbitration.
Parties are expected to participate in good faith, maintain confidentiality, provide relevant information, attend scheduled meetings and observe agreed timelines.
KRA said ADR can help taxpayers resolve disputes faster than court proceedings while reducing legal and administrative costs.
It also provides an opportunity for parties to discuss issues confidentially, work together on practical solutions and preserve their working relationship.
Taxpayers can apply for ADR by completing the prescribed ADR Application Form and submitting it, together with relevant supporting documents, to the Tax Dispute Resolution Office.
While most tax disputes may qualify, KRA noted that ADR may not be applicable where a settlement would conflict with the Constitution or tax laws, where judicial interpretation of the law is required, or where a court ruling is necessary in the public interest.
It may also not apply where there is already an undisputed court judgment or either party is unwilling to participate.
KRA said the process is intended to provide timely resolution, with Section 55 of the Tax Procedures Act providing for ADR to be concluded within 120 days, while court-referred ADR follows timelines set by the court.
Emphasising the benefits of choosing dialogue over litigation, KRA said taxpayers can use ADR to resolve disagreements through a process focused on constructive engagement rather than confrontation.
"Alternative Dispute Resolution offers taxpayers an opportunity to resolve disagreements in a way that is faster, less costly, confidential, and built on constructive engagement," the authority noted.
The authority further said ADR can help strengthen relations between taxpayers and KRA while promoting compliance and ensuring disputes are addressed efficiently.
"By choosing ADR, taxpayers and KRA work together to reach fair, practical, and sustainable solutions; strengthening trust, improving compliance, and ensuring disputes are resolved efficiently for the benefit of all parties," KRA concluded.
This comes over a month after KRA announced the implementation guidelines for a new tax amnesty programme following the coming into force of the Finance Act, 2026.
In a statement on Friday, July 3, the agency said the initiative is aimed at easing the financial burden on taxpayers, encouraging voluntary compliance, and helping individuals and businesses regularize their tax records before the end of the year.
"Re-introduced under the Finance Act, 2026, this initiative waives 100% of penalties, interest and fines on tax debts accrued up to 31st December 2025. The amnesty window opens on 1st July 2026 and closes strictly on 31st December 2026," the statement read.
KRA noted that the latest programme follows two successful amnesty exercises that helped boost revenue collection while bringing thousands of taxpayers back into compliance.
"This builds on the success of the previous two amnesty cycles, which successfully recovered Kshs. 80.9 Billion in principal tax payments while regularizing thousands of taxpayers," the statement added.
Under the guidelines, taxpayers who had already settled their principal tax liabilities by December 31, 2025, will automatically receive a full waiver of outstanding penalties and interest without submitting an application.
KRA also announced relief for taxpayers facing only late filing penalties; those with no outstanding principal tax will qualify for automatic waivers once they file all pending tax returns.
For taxpayers with unpaid principal tax accrued before 2026, KRA said paying the entire amount during the amnesty period will immediately trigger a waiver of all corresponding penalties and interest.
Those unable to make a one-time payment can instead apply for a structured payment plan through the KRA iTax system.
However, all principal taxes under such arrangements must be fully paid by December 31, 2026, for the taxpayer to qualify for the waiver.
