Legislative framework of tax litigation/COURT PROCEEDINGS FOR TAX DISPUTES LITIGATION/

 

 

 The Tax Appeals Tribunal (TAT) was specifically established to hear tax disputes, and effectively serves as the forum of first instance before tax litigation can commence on a tax dispute. Where a case is referred directly to the courts, circumventing the pre-litigation procedure set out by the TAT, the courts will often refer that matter back to the TAT if it comes to the judge's attention that the pre-litigation procedure has been circumvented. There are three main issues that commonly form the subject of tax litigation in Kenya:

· Appeals from technical decisions of the TAT.
· Abuse of process or other administrative excesses by the Kenya Revenue Authority (KRA).
· Infringement of constitutional rights (where taxpayers have filed constitutional petitions).[1]


Legislative framework of tax litigation
Civil tax litigation
The principal pieces of legislation governing civil tax litigation are as follows:
· Civil Procedure Act.
· Tax Procedures Act.
· Tax Appeals Tribunal Act.
· Tax Appeals Tribunal, Appeals to the High Court Rules 2015.
· Tax Appeals Tribunal Procedure Rules 2015.
· Court of Appeal Rules (CA Rules).


Criminal tax litigation
The principal pieces of legislation governing criminal tax litigation are as follows:
· Criminal Procedure Code.
· Tax Procedures Act.
· Tax Appeals Tribunal Act.
· Tax Appeals Tribunal, Appeals to the High Court Rules 2015.
· Tax Appeals Tribunal Procedure Rules 2015.
· CA Rules.


COURT PROCEEDINGS FOR TAX DISPUTES LITIGATION
Civil law
The main stages of typical court proceedings are as follows:
• Lodging and service of the appeal papers.
• Obtaining directions from the judge on how the case will proceed.
• Presentation of submissions, whether written or oral, depending on the judge's directions


Criminal law
The main stages of typical court proceedings are as follows:
• Drafting of the charge sheet by the prosecution, stating the exact nature of the offence for which the accused is charged.
• Plea taking.
• Prosecution presents its case.
• Court makes a determination on whether the accused has a case to answer.
• If it is determined that there is no case to answer, the court will dismiss the case. If, however, there is a case to answer, the accused person will enter his defense.
• Sentencing/judgment of the court on hearing both parties.[2]
TAX DISPUTE PROCESS
Tax Decision – Section 2 & 50 TPA
TO
Objection by Taxpayer – Section 51(1) TPA- within 30 days
TO

Objection decision – Section 51(8) to (11) TPA– Within 60 days

TO

Appeal to Tax Appeals Tribunal– Section 52 TPA
TO

Appeal to High Court / Court of Appeal – Section 53 &54 TPA

[2] Tax litigation in Kenya: overview, Practical Law Country Q&A 9-624-0339 (2016) ;Thomson Reuters