How to Use Kra's Alternative Dispute Resolution (ADR) for Tax Disputes in Kenya (2026), Step-by-step Guide

Kenya’s tax dispute resolution landscape has shifted decisively toward out-of-court settlement, and understanding how to use KRA ADR in Kenya in 2026 is now a practical necessity for any taxpayer, tax manager or in-house counsel facing an assessment they intend to challenge. The Kenya Revenue Authority (KRA) operates a formal Alternative Dispute Resolution framework, grounded in Section 55 of the Tax Procedures Act, 2015, that enables taxpayers and KRA to negotiate a binding settlement through a facilitated mediation process, without proceeding to the Tax Appeals Tribunal or the High Court.

The Judiciary’s 2026 Mediation Summit and expanded Court Annexed Mediation programme have reinforced institutional support for mediation pathways, while the Finance Bill 2026 proposals have prompted fresh scrutiny of administrative deadlines and assessment practices. This guide consolidates every step of the KRA ADR process, from eligibility and application to enforcement and appeal, into a single, actionable resource for 2026.

Overview of the KRA ADR Process and Who It Applies To

KRA ADR is a voluntary, facilitated mediation process administered by KRA’s Tax Dispute Resolution (TDR) office. It is available to individual taxpayers, companies, partnerships, trusts and authorised tax agents who wish to resolve a tax dispute without proceeding to formal litigation. The framework applies to disputes arising from assessments, objection decisions, refund claims and other determinations made under Kenya’s revenue laws.

Not every dispute qualifies. KRA’s published ADR framework excludes the following categories:

• Disputes requiring a settlement contrary to the Constitution or revenue laws. KRA cannot agree to an outcome that contravenes statute.
• Matters involving purely technical legal interpretation. Where the dispute turns on a point of law rather than on facts or quantum, ADR is generally inappropriate.
• Disputes raising issues of significant public interest. KRA retains discretion to decline ADR where the outcome would set a precedent affecting the broader tax base.

Typical disputes well-suited to KRA ADR include disagreements over the quantum of an assessment, refund claims where supporting documentation is contested, and cases where both parties would benefit from a cooperative settlement rather than protracted tribunal hearings. The process begins with the submission of the official ADR Application Form (KRA/TDR/ADR/001), which is available as a PDF download from the KRA website. Applications may be submitted physically to the TDR office or electronically to ADR@KRA.GO.KE.

Eligibility and Prerequisites for KRA ADR

Who may apply

Any person who is a party to a tax dispute with KRA may apply for ADR. This includes individual taxpayers, corporate entities, partnerships and non-resident persons subject to Kenyan tax obligations. Where the applicant is not acting in person, a duly authorised tax representative, such as a tax agent, advocate or accountant, may file the application on the taxpayer’s behalf, provided a signed letter of authority or power of attorney is attached.

When to use ADR (pre-appeal vs post-appeal eligibility)

ADR may be initiated at several stages of the tax dispute resolution Kenya pathway:

• After filing an objection, while the objection is pending before KRA.
• After receiving an objection decision, before filing an appeal with the Tax Appeals Tribunal.
• During tribunal or court proceedings, with the permission of the Tribunal or Court, the parties may agree to attempt ADR even after formal proceedings have commenced.

KRA may also refer a matter to ADR on its own initiative. In practice, ADR is most effective when initiated early, ideally before either party incurs the cost and delay of tribunal proceedings.

Before filing, applicants should ensure the following prerequisites are in place:

• A completed ADR Application Form (KRA/TDR/ADR/001), with all required fields filled accurately.
• Evidence of the underlying dispute, typically the assessment, objection or objection decision.
• Consideration of payment obligations, filing for ADR does not automatically suspend the taxpayer’s obligation to pay the assessed tax. Where enforcement is a concern, applicants should seek a stay or clarify payment arrangements with KRA concurrently.

How to Use KRA ADR in Kenya, Step-by-Step Procedure

The following numbered steps trace the KRA ADR procedure from preparation to closure. The timeline table below summarises each stage, the responsible party and the typical duration.

Step 1: Complete the ADR Application Form (KRA/TDR/ADR/001)

Obtain the official ADR Application Form from the KRA website. The form requires the applicant’s details (name, KRA PIN, contact information), a description of the dispute, the tax type and period in question, the amount in dispute, and a summary of the grounds for seeking ADR. Attach all supporting documents in an organised annex, contracts, returns, assessment notices and correspondence with KRA. If you are represented by a tax agent or advocate, attach a signed letter of authority or power of attorney as a separate annex.

Step 2: Submit the application to KRA

Submit the completed form and supporting documents by one of two methods:

• Physical delivery, hand-deliver or courier the application to the KRA Tax Dispute Resolution office.
• Email submission, scan the completed form and annexes and send to ADR@KRA.GO.KE.

Retain proof of delivery (courier receipt, email sent confirmation) and note the date of submission. This date triggers the statutory clock for ADR timelines. Request a written acknowledgement and case reference number from KRA.

Step 3: KRA admissibility review and acceptance

Upon receipt, KRA’s TDR office reviews the application for completeness and admissibility. The review considers whether the dispute falls within the eligible categories, whether the application form is properly completed, and whether the required documents are attached. KRA may request additional information or clarification before accepting the application. Once accepted, KRA issues a formal acceptance letter confirming the commencement of the ADR process and the date from which statutory timelines begin to run.

Step 4: Appointment of facilitator and scheduling of mediation sessions

KRA appoints a facilitator, typically a senior KRA officer from the TDR unit, to manage the mediation. The facilitator contacts both parties to agree on a schedule for the ADR sessions. Sessions may be conducted in person at KRA offices or, where agreed, virtually. Both parties should exchange written position statements and key documents in advance of the first session to enable efficient discussion. All communications during the ADR process are treated as confidential and are inadmissible in subsequent tribunal or court proceedings if the process fails.

Step 5: Negotiate and reach settlement (or record disagreement)

The facilitated sessions follow a structured negotiation format. The facilitator guides both parties through their respective positions, identifies common ground and assists in narrowing the disputed issues. Where a settlement is reached, the parties execute a written settlement agreement. This agreement records the adjusted tax liability (if any), the payment terms, interest treatment and any conditions. A settlement reached through KRA ADR is binding on both parties once signed. KRA adjusts its records to reflect the agreed position, and the taxpayer’s account is updated accordingly.

Step 6: If ADR fails, preserve your appeal rights and proceed to the Tax Appeals Tribunal

If no settlement is reached within the statutory timeline, or if the parties agree that further negotiation is unproductive, the ADR process is formally closed. The facilitator issues a closure notice. The taxpayer retains the right to proceed to the Tax Appeals Tribunal or, where applicable, to the High Court. It is critical to obtain a written record of the ADR closure, including the date, and to calculate remaining appeal deadlines from the date of the original objection decision, not from the ADR closure. Early engagement of counsel at this stage is strongly recommended to preserve procedural rights.

Documents Needed for KRA ADR, Required Checklist

Organising a complete submission at the outset avoids delays during the admissibility review. The following table sets out the documents needed for KRA ADR and practical notes on each item.

For complex disputes, prepare a concise executive summary (no more than two pages) that sets out the facts, the legal basis for the taxpayer’s position and the proposed resolution. This assists the facilitator in understanding the core issues before the first session and accelerates the tax mediation Kenya process.

ADR Timeline Kenya, Key Deadlines and the 90 vs 120 Day Question

One of the most frequently raised questions about the ADR timeline Kenya framework is the applicable statutory time limit. Section 55 of the Tax Procedures Act, 2015 provides the legislative basis for ADR, and KRA’s published ADR guidance references a period of 120 days within which the ADR process should be concluded. Some practitioners and earlier case law commentary, however, reference a 90-day window under the same statutory provision.

In practice, this discrepancy arises from amendments to the Tax Procedures Act and differences in interpretation between the original statutory text and subsequent KRA administrative guidance. The prudent approach for taxpayers is as follows:

• Assume the shorter deadline, plan all preparation, submissions and session scheduling on the basis of a 90-day window from the date of KRA’s acceptance letter.
• Confirm the operative date, the KRA acceptance letter should state the commencement date of the ADR process. Diarise this date and calculate both the 90-day and 120-day endpoints.
• Seek written confirmation from KRA, request that the TDR office confirm in writing the applicable deadline for the specific case, particularly if the dispute involves large sums or complex issues.
• Preserve appeal rights, regardless of which deadline applies, ensure that any appeal to the Tax Appeals Tribunal is filed within the statutory window calculated from the date of the original objection decision.

Industry observers expect that as KRA’s ADR caseload grows, particularly in light of the Judiciary’s 2026 mediation push, the authority will move toward more explicit and consistent deadline guidance. Until that happens, conservative planning remains essential.

Cost of ADR Kenya, Fees and Tax Considerations

KRA does not currently publish a fixed filing fee for ADR applications on its main ADR pages. The cost of ADR in Kenya is therefore driven primarily by the taxpayer’s own professional and administrative expenses. The table below summarises the typical cost categories.

From a tax accounting perspective, any settlement amount agreed through ADR adjusts the taxpayer’s assessed liability. Interest and penalties may be reduced or waived as part of the settlement terms, this should be expressly addressed in the settlement agreement. Professional fees incurred in the ADR process may be deductible as an expense of earning income, subject to the general provisions of the Income Tax Act. Seek specific advice on the deductibility of these costs in your circumstances.

What Changed in 2026, Practical Impact on the KRA ADR Process

Two developments in 2026 have reinforced the relevance of the KRA ADR framework:

Judiciary mediation expansion. The Judiciary of Kenya convened the 2026 Mediation Summit, reinforcing its commitment to Court Annexed Mediation and encouraging alternative pathways for dispute resolution across all sectors, including tax. The likely practical effect is increased institutional acceptance of ADR outcomes, faster referrals between courts and ADR processes, and growing familiarity with mediation among judicial officers handling tax appeals.

Finance Bill 2026 proposals. The Finance Bill 2026 introduced several proposals affecting tax administration, assessment timelines and compliance procedures. Taxpayers and advisors should review the enacted provisions of the Finance Bill 2026 to confirm whether any amendments have altered the statutory deadlines, objection procedures or ADR-related provisions of the Tax Procedures Act. Early indications suggest that the direction of reform favours expanded use of administrative dispute resolution, but the precise impact on ADR timelines will depend on the final enacted text. Confirm the effective date of any relevant amendments before relying on the new provisions.

Common Pitfalls When Using KRA ADR, and How to Avoid Them

• Missing the statutory ADR window. The most consequential error is allowing the 90-day or 120-day ADR period to lapse without settlement or without preserving appeal rights. Remedy: diarise the acceptance date immediately upon receipt of KRA’s confirmation, assume the shorter 90-day deadline for planning purposes, and set reminders at 30-day intervals.
• Poorly organised evidence. Incomplete or disorganised submissions slow the admissibility review and weaken the taxpayer’s negotiating position. Remedy: use an indexed annex system (Annex A, B, C), prepare a two-page executive summary, and highlight the specific pages that support each argument.
• Inadequate authority for representatives. An application submitted by an agent without a valid letter of authority or power of attorney will be rejected or delayed. Remedy: execute and attach a clear letter of authority before submission, specifying the representative’s name, the taxpayer’s PIN and the scope of the authorisation.
• Accepting a settlement without enforceable terms. A vague or incomplete settlement agreement creates problems at the enforcement stage. Remedy: draft the settlement agreement with specific payment amounts, a payment schedule, interest treatment, and a clause recording the consequences of default by either party.
• Not preserving appeal rights. Some taxpayers assume that entering ADR suspends or resets tribunal deadlines, this is not always the case. Remedy: obtain a written record of ADR closure, calculate remaining appeal deadlines from the date of the original objection decision, and file protective tribunal proceedings if the ADR timeline risks overlapping with statutory appeal windows.

Sources

1. Kenya Revenue Authority, ADR Landing Page / Learn About ADR
2. KRA, ADR Application Form (PDF)
3. Tax Procedures Act, No. 29 of 2015 (Kenya Law)
4. Judiciary of Kenya, Mediation Summit / Court Annexed Mediation (2026)
5. Finance Bill 2026 (Parliament of Kenya)
6. Gichuri & Partners, KRA ADR Process
7. Business Daily Africa, KRA Out-of-Court Deals