It’s no secret that tax authorities like the Kenya Revenue Authority (KRA) are feared by taxpayers. Most individuals and businesses quiver a little when they receive random emails and formal letters from KRA. What if it’s a compliance issue? Or maybe they have imposed a penalty or interest on your taxpayer account.
Disagreeing with KRA decisions can lead to confusion, frustration, and fear. This is because tax authorities are known to use coercive power to recover taxes, such as audits, penalties, and interest. Additionally, tax laws in Kenya are complex, and most taxpayers don’t fully understand them. Also, there is an unspoken lack of trust in government integrity, especially in tax matters.
If you’ve received a concerning KRA decision, don’t panic. KRA decisions aren’t final and conclusive. Under Section 52 of the Tax Procedures Act, 2015, a taxpayer can appeal a KRA decision if dissatisfied. This post is a step-by-step guide for the KRA appeal application. We’ll also discuss a few aspects to consider and do for a successful KRA appeal application.
What is a KRA Appeal Application?
To fully understand what a KRA appeal application is, let’s break down the phrase:
- KRA- The appeal concerns KRA, Kenya’s tax authority.
- Appeal- An appeal is a request to a higher authority to review and change the decision made by a lower authority.
- Application- An application is a formal written request made to a court or tribunal to ask for a specific action or initiate legal proceedings.
Therefore, a KRA appeal application is a formal application made to the Tax Appeals Tribunal (TAT) to challenge KRA’s decision. Suppose KRA imposed erroneous penalties and interests on your taxpayer account. In that case, this is what a KRA appeal application would look like:
- KRA imposes an erroneous penalty and interest.
- You (the taxpayer) file an objection via iTax or a formal letter.
- KRA reviews your application and issues an objection decision.
- You are not satisfied with the objection decision.
- You appeal the decision to the TAT.
What’s an Appellable Decision? Which KRA Decisions Can I Appeal?
Section 52 of the Tax Procedures Act says a taxpayer can appeal an “appealable decision” to the TAT and higher courts if dissatisfied with a KRA decision. This means not all decisions are appealable. So what’s an appealable decision, and what KRA decisions can you appeal? An appellable decision is a KRA decision that you can legally challenge before a higher authority. The keyword here is legally. If you believe the KRA decision is unfair, incorrect, and made without the correct legal basis, it’s appealable. Below are examples of KRA decisions you can appeal:
- Objection decision.
- Amended assessment.
- Tax ruling.
- Penalties and interest
- Tax refund claims and related decisions.
- Customs and excise decisions.
- Audit outcomes and decisions.
As a rule of thumb, an appellable decision should be:
- A formal tax decision.
- Communicated to you by KRA, either via iTax notification, email, or in a formal letter.
- Directly affects your tax position and liability.
- Legally arguable as provided by tax laws.
If you’re unsure, a tax consultant can help you determine if your disagreement with KRA is an appellable decision.
Step-by-Step Guide For KRA Appeal Application
Follow these steps to file an appeal with the TAT via iTax:
- Go to https://itax.kra.go.ke/KRA-Portal/ on a web browser.
- Log in to your account.
- Navigate to Assessment Disputes.
- Select Notice of Intention to Appeal.
- Choose Appeal to the Local Committee Tribunal.
- Verify the pre-populated form, including the KRA PIN and taxpayer name.
- Fill in the Notice Details. These include grounds for appeal and supporting documents.
- Click Submit.
You have successfully appealed a KRA decision to the TAT.
KRA Appeal Application Timelines To Keep In Mind
One of the common reasons why TAT and higher authorities dismiss or reject KRA appeal applications is missed deadlines. Be keen when filing your applications and ensure they are filed within the provided timelines. Here are key timelines to keep in mind during the KRA appeal application process:
- Filing an objection letter: 30 Days– You have 30 days following an assessment to lodge an objection to KRA.
- KRA’s Objection Decision: 60 Days– KRA must respond to the taxpayer within 60 days.
- Filing an Appeal to TAT: 30 Days– The taxpayer must file a KRA appeal application with the TAT within 30 days of receiving KRA’s decision.
- Appeal to High Court: 30 Days– After the TAT has delivered its ruling, a dissatisfied taxpayer has up to 30 days to appeal to the High Court.
Key Aspects To Consider Before Appealing a KRA Decision to the TAT
From afar, the KRA appeal application process looks straightforward. This is far from the truth- it’s a complex process with set guidelines, requirements, and a strict checklist. Here are important aspects to consider before appealing a KRA decision to the TAT:
- You must file a Notice of Objection with KRA before initiating the appeal process with TAT.
- Clearly state the grounds for appeal, i.e, why you are disputing the KRA decision.
- Clearly outline the amendments you want (the outcome you are expecting from the TAT ruling).
- Include supporting documents such as the disputed tax assessment, invoices, bank statements, financial records, tax returns, correspondence, etc.
- You must pay a non-refundable appeal filing fee of KSh. 20,000.
- Within 14 days after lodging the appeal, you must submit relevant appeal documents like the memorandum of appeal (MOA), statement of facts, a copy of the KRA tax decision, and an index of all submitted documents.
- You must serve a copy of the appeal documents to the KRA Commissioner.
- The burden of proof lies with you, the taxpayer. Your case is limited to your grounds of appeal, and you must think them through before application.
- The TAT sets a hearing date after a successful appeal application.
- The TAT delivers a written decision that may uphold, vary, or set aside the KRA decision.
- You may appeal the TAT decision to the High Court if you are dissatisfied.
Importance of Professional Representation in KRA Appeal Application
Tax disputes are draining, both financially and in terms of time. It’s important to engage a tax consultant or legal professional. Here are the benefits of professional representation in a KRA appeal application:
- Peace of mind and assurance knowing an expert is handling your tax dispute matters.
- A professional ensures all required paperwork and other checklists are fulfilled before filing the appeal.
- An experienced tax consultant helps in drafting your appeal, preparing strong grounds and arguments, and presenting evidence.
- Saves time. You can focus on your career or business as the tax expert handles your tax matters.
- A tax advisor can help you decide when an appeal is ideal and when alternative dispute resolution (ADR) is better.
Do you need assistance with a tax dispute with KRA? Contact Gichuri & Partners for professional help and representation in the KRA appeal application.
