Use tribunal to settle tax rows quickly, urges private business
Kenya Private Sector Alliance chief executive Carole Kariuki speaks during the alliance’s monthly briefing on March 3, 2015. With her is media relations and communication manager Henry Githaiga. SALATON NJAU |
What you need to know:
- “The refunds will also help balance the books of the various companies and jerk up the potential for substantial new investment or expansions,” Kepsa said.
- It is hoped that the tribunal will reduce the number court cases pitting the taxman against private companies and also address and resolve rows faster.
- Investors also want the government to fast-track digitisation of land records.
Business leaders want the government to quickly establish a special tribunal to deal with tax disputes.
Through their lobby, the Kenya Private Sector Alliance (Kepsa), the entrepreneurs said billions of shillings were held up in court cases, hurting the companies and holding back expansion plans.
The Kenya Revenue Authority has proposed the setting up of a tribunal through the Tax Procedures Bill. “Judicial dispute resolutions often see the taxman and firms go through long and expensive court battles. This has led to huge revenue wastage by both parties.
CLEAR VAT REFUNDS
“This new mechanism, once in place, will resolve up to 80 per cent of all tax disputes through arbitration,” Kepsa chief executive officer Carole Kariuki said.
It is hoped that the tribunal will reduce the number court cases pitting the taxman against private companies and also address and resolve rows faster.
The revenue authority has in the past been involved in numerous litigations with companies, mainly on income and VAT. An alternative dispute resolution mechanism is part of new measures the taxman has to improving the country’s attractiveness to foreign investment.
The taxman also has a new system to help clear VAT refunds within three months, bringing to an end a long-standing dispute between it and firms.
On Monday, the taxman announced that it would begin clearing the backlog of cash it owes investors in VAT refunds this week. The first Sh9.3 billion has been processed.
“The payment of refunds of Sh9.3 billion provides considerable stimulus to the economy as it will help the industries lower cost of borrowing.
“The refunds will also help balance the books of the various companies and jerk up the potential for substantial new investment or expansions,” Kepsa said.
Of the Sh9.3 billion, Sh5 billion will be paid directly to businesses while the rest will meet tax debts owed by companies.
Investors also want the government to fast-track digitisation of land records.
This will make it easier to identify and register land required for the development of industry and expand small and medium size enterprises.
