To explore how tax objections in Kenya work, let’s begin with a scenario that many taxpayers are all too familiar with:
Planting season is around the corner, and Ms. Kalwa, who runs a busy agri-supply shop, is stocking up on fertilizer. Farmers are flooding her shop with orders, and to keep up with demand, she imports extra supplies.
Every season, she navigates the usual customs processes: classification of goods, import duties, paperwork. It’s never fun, but it has always been predictable. Or so she thought.
This time, the unexpected happens.
Just as she’s preparing to sell her imported fertilizer, the Kenya Revenue Authority (KRA) serves her with a tariff ruling. According to KRA, she has been classifying her fertilizer under the wrong tariff code. The reclassification means higher taxes, and worse, her shipment is impounded.
For Ms. Kalwa, the implications are huge. Customers are waiting. The delay means losses. And the new tax rate could crush her margins. She is convinced KRA’s interpretation of the East African tariff rules is wrong, but what can she do?
The truth is, Ms. Kalwa isn’t alone. Across industries, businesses find themselves in the same position, squeezed between regulatory interpretations and business realities. A single tax ruling can change the entire game.
This article is a guide on how to approach such situations, what the law says, what options are available, and why the right strategy can make all the difference.
Step 1: Objecting to KRA’s Decision
To properly challenge KRA’s decision, The Tax Procedures Act requires Ms. Kalwa to lodge an objection with Commissioner at first instance against the tax decision within 30 days of notification. Any such notice of objection must state:
- The precise grounds of objection,
- The amendments required to be made to correct the decision, and
- The reasons for the amendments.
The Commissioner has sixty (60) days to make an objection decision from the date the notice of the objection was lodged
Step 2: Appeal to the Tax Appeals Tribunal (TAT)
In the event Ms. Kalwa is still dissatisfied with the objection decision, Section 52 of the Tax Procedures Act gives allows her to appeal the decision to the Tribunal.
The Tribunal is bound to hear and determine the appeal within 90 days from the date the appeal is filed with the Tribunal.
Step 3: Appeal to the High Court
Should the Tribunal still rule against her, Ms. Kalwa can escalate further this time to the High Court.
Here, tax disputes become full-blown litigation. The High Court hears appeals from TAT but can also step in if there’s evidence of abuse of process by KRA or even alleged violations of constitutional rights.
Settlement Out of Court/ Alternative Dispute Resolution
Litigation isn’t the only path. The law also allows for out-of-court settlement through negotiation, mediation, or conciliation. If both sides agree, and the Tribunal or Court permits it, they get 90 days to resolve the matter. If they fail, the case bounces back to the courtroom.
ADR can save time, money, and business relationships, if handled carefully.
For business owners like Ms. Kalwa, a tax dispute isn’t just about paperwork. It’s about survival, cash flow, and reputation.
And while the law provides clear steps to challenge KRA’s decisions, it also demands precision, deadlines, and strong legal reasoning. Missing a step or filing a weak objection can make all the difference.
That’s why when the stakes are high, like when your stock is impounded and your business is on the line, it pays to let the experts handle that tax dispute.
Written by: Micheal Muya | Tax Lead MMW Advocates LLP