KRA Pushes to Cut Tax Dispute Resolution from 120 to 90 Days Through Private Sector Reforms

Kenya Revenue Authority (KRA) has reaffirmed its commitment to creating a fair, transparent and predictable tax environment that supports business growth while ensuring that every taxpayer contributes their fair share towards national development.

Speaking during a high-level engagement with the Kenya Private Sector Alliance (KEPSA), KRA Commissioner General Mr. Adan Mohammed, EGH said that the Authority is implementing reforms aimed at creating a level playing field for all businesses by eliminating tax leakages, enhancing compliance and improving service delivery.

The meeting brought together KRA’s senior leadership and KEPSA representatives to deliberate on key tax administration issues affecting the private sector and explore collaborative solutions that will enhance Kenya’s competitiveness, facilitate trade and improve voluntary tax compliance. The Commissioner General noted that sustainable revenue growth can only be achieved when businesses compete fairly under the same rules and all taxpayers meet their tax obligations.

“Our commitment is to create a level playing field where every business competes fairly and every taxpayer meets their obligations. When some businesses evade taxes while others comply, compliant businesses are unfairly disadvantaged. Our objective is to build a tax system that is fair, transparent, predictable and efficient for all taxpayers from micro-enterprises to large corporations,” said Mr. Mohammed.

He emphasized that KRA’s role extends beyond revenue collection to creating an environment that enables businesses to thrive and comply.

“We want businesses to succeed because when businesses grow, tax revenues grow naturally. Our responsibility is to ensure that taxpayers who are willing to comply can do so through simple, reliable and efficient systems.”

The Commissioner General observed that Kenya’s tax burden continues to be borne by a relatively small number of compliant taxpayers, making it necessary to broaden the tax base rather than increasing pressure on those already meeting their obligations.

As part of efforts to improve taxpayer experience, the Authority is integrating the Integrated Customs Management System (iCMS) with iTax to automate verification of export and import transactions, significantly reducing human intervention.

The reforms are also expected to reduce Value Added Tax (VAT) refund processing timelines from several weeks to less than ten minutes for eligible claims, improving cash flow for businesses while enhancing transparency and accountability.

The Commissioner General acknowledged concerns regarding VAT refund processing and assured the private sector that KRA is reviewing system processes to ensure equitable treatment of businesses of all sizes.

The discussions also focused on eliminating market distortions arising from inconsistent classification of raw materials and intermediate goods, which have in the past created unintended competitive advantages. Mr. Mohammed noted that KRA is working closely with stakeholders to simplify tax administration, close compliance gaps and eliminate practices that disadvantage compliant businesses. He further observed that tax incentives should ultimately benefit consumers through competitive pricing and improved productivity, rather than creating opportunities for market distortions.

On regional trade, the Commissioner General said that KRA is strengthening collaboration with regional customs administrations and enhancing data sharing to improve transparency in cross-border trade while safeguarding legitimate commerce.

He emphasized that technology-driven customs processes and enhanced intelligence-led enforcement will continue to protect compliant traders while addressing illicit trade and revenue leakages.

The private sector called on KRA to expand the use of Alternative Dispute Resolution (ADR) mechanisms by increasing mediation capacity and working with professional bodies to accelerate dispute resolution. They requested KRA to review time taken to resolve tax disputes from 120 days to approximately 90 days, allowing businesses to focus on growth.

They appreciated KRA for its continued partnership with KRA, noting that regular dialogue with them remains critical in shaping the business environment and a responsive tax administration.

On his part, the Commissioner general encouraged businesses to engage the Authority whenever they encounter challenges, emphasizing that early engagement allows issues to be resolved efficiently while supporting compliance.

“Tax administration works best when government and the private sector work together. Through continuous dialogue, digital innovation and shared responsibility, we can build a tax system that promotes fairness, encourages investment and supports Kenya’s economic growth,” he said.

KRA reaffirmed its commitment to working closely with KEPSA and other stakeholders to implement practical reforms that improve taxpayer experience, promote voluntary compliance and create a competitive business environment where every taxpayer operates under the same rules.

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