The Kenya Revenue Authority (KRA) has successfully released approximately Sh86.5 billion previously tied up in tax disputes involving firms and individuals through enhanced dispute resolution frameworks and intensified collections, signaling a significant boost to national revenue mobilisation efforts.
This breakthrough comes as part of broader reforms to expedite resolutions and improve fiscal efficiency amid mounting public scrutiny over delayed tax recoveries and judicial backlog.
KRA’s Alternative Dispute Resolution (ADR) program has emerged as the cornerstone of the unlocking strategy.
In the 2023/2024 financial year alone, the Authority resolved 1,184 cases viaADR, recovering Ksh21.9 billion up from prior years’ levels reflecting a rise in ADR completion rates from 78% in FY2020/21 to 81%, and reducing average resolution time to 38 days from the statutory 120-day cap.
The digitally-driven ADR process, introduced in 2015 under the Tax Procedures Act, enables mediation and negotiation between disputed parties without engaging the courts.
Beyond ADR, KRA has intensified efforts to expedite pending cases at both the Tax Appeals Tribunal (TAT) and courts.
Parliamentary Budget Office (PBO) data reveals that Sh313.5 billion remains locked in 1,288 pending cases Ksh165.1 billion in 747 TAT cases and Sh148.4 billion in 541 court proceedings.
Yet, KRA has already reclaimed Ksh40.3 billion from resolved cases, including Ksh31.4 billion via ADR in prior years, showing growing progress on backlog reduction.
The cumulative outcome amounts to approximately Sh86.5 billion being released back into circulation comprising sums recovered through ADR, withheld tribunals, and selected court settlements.
This injection of resources is critical for supporting the national budget, enabling reallocation to priority sectors such as healthcare, education, and infrastructure, while also alleviating fiscal pressure on the Exchequer.
KRA officials have also deployed internal reforms to nurture compliance and mitigate future disputes.
Themes include tightening transfer pricing audits, implementing anti-corruption safeguards, enhancing taxpayer intelligence systems, and enabling anonymous tips under the iWhistle platform.
Tax experts commend the increased ADR throughput and virtual mediation capabilities now conducted via Zoom, Skype, or Google Meet as innovations reducing delays and court dependency.
The virtual ADR capability, introduced during the COVID‑19 pandemic, has broadened access across geographies and stakeholders.
However, challenges persist. Analysts warn that while the recovered sums are significant, they represent only a fraction of the total backlog. Continued dispute resolution inertia, procedural complexity, and taxpayers’ mistrust remain obstacles.
Stakeholders emphasize the need for stronger enforcement of ADR outcomes, improved transparency, and clear guidelines to prevent future escalation of disputes.
In summary, KRA’s concerted drive to unlock Sh86.5 billion from long-standing tax disputes through ADR, streamlined tribunal processes, and strategic collection interventions underlines its commitment to fiscal discipline.
As the authority scales up these mechanisms, the country stands to gain not only more immediate revenue but also resilience within its tax administration framework.
Written By Ian Maleve
