Treasury loses bid to hire staff for tax appeal tribunal

Ms Anne Amadi, Chief Registrar of the Judiciary. FILE PHOTO | NMG

By OTIATO GUGUYU
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Summary

• Parliament has rejected a bid by the Treasury to hire staff of the Tax Appeals tribunal and set their pay, terming it a threat to the arbitrator’s independence from the executive.
• The Committee said doing so would compromise the tribunal’s independence and maintained that its staff, budget, and remuneration be handled by the Judicial Service Commission (JSC).

Parliament has rejected a bid by the Treasury to hire staff of the Tax Appeals tribunal and set their pay, terming it a threat to the arbitrator’s independence from the executive.

The National Assembly’s Committee on Finance and National Planning rejected the recommendations of the Tax Appeals Tribunal Amendment Bill 2021 which had sought to transfer the hiring and remuneration functions of the Tribunal staff to the National Treasury.

The Committee said doing so would compromise the tribunal’s independence and maintained that its staff, budget, and remuneration be handled by the Judicial Service Commission (JSC).

The State-backed Tax Appeals Tribunal Amendment Bill- 2021 was brought to Parliament after a court ruled in favour of activist Okiya Omtata to move the appointment of tribunals from the Executive to the Judiciary.

While the law transferred membership of the tribunal to JSC, Treasury sought to retain control of staff recruitment through the Public Service Commission (PSC) and the budget which would be submitted by the Cabinet Secretary for parliamentary approval.

“Amend clause 4 by providing that the secretary and staff of the tribunal shall be appointed by the Judicial Service Commission. This is to secure the independence of the tribunal and to ensure the tribunal is independent and impartial,” Chief Registrar of the Judiciary Anne Amadi said during the committee meeting.

Ms Amadi also called for the tribunal’s budget estimates to be part of the Judiciary budget prepared by the Chief Registrar and not the tribunal secretary through the Treasury.

The committee agreed with the proposal from the Judiciary noting it was in line with the principle of separation of powers.

The Tax Appeals Tribunal is an arbitrator between taxpayers and the Kenya Revenue Authority Commissioner which rules on complaints against the taxman’s assessments.

Currently, the tribunal is hosted by KRA who facilitates their budgetary allocations, office space, and general infrastructural requirements creating the perception of conflict of interest.

The appointment of its members was not competitive as they were handpicked by the CS Treasury and the tribunal held sittings like a board of public entity only required to have four meetings a year.

This led to the build-up of case backlogs which currently stand at 500 unheard matters leading to delays in realising revenues by the government and contingent liabilities for companies that have to be provided for.

The new law seeks to change how the tribunal operates by appointing permanent members competitively through the JSC who will hear matters all year round.