Tax has been a critical matter from time immemorial, but more so in today’s dispensation. James Karanja, the Tax Associate Director at Anjarwalla & Khanna, stated in an interview on Spice FM in February 2023 that tax is at the heart of the social contract between a people and its leadership. Moreover, if you are going to be, you must make. 

Tax law is enshrined in various statutes, including the Income Tax Act, the East African Community Customs Acts, the VAT Act, the Stamp Duty Act, and the Excise Act. The Tax Acts highlighted are the backbone of tax legislation and administration in Kenya. 

The Kenyan government has switched tax mobilization to high gear, especially over the last two years. However, while there’s consensus that taxes are a necessary evil, the question of which taxes should apply and whether they are viable lingers. Besides imposing punitive taxes exacerbating the ever-rising cost of living, Kenyans feel they do not derive value from their taxes regarding access to public services.

 Growing discontent with how tax mobilization is handled, particularly regarding the Finance Bill 2024, sparked the #OccupyParliament protests on June 18th, 2024.

Therefore,  the question of whether the taxes imposed today are progressive about the taxpayer’s welfare makes tax law a practice area worth exploring for the next generation of lawyers. So, what comes to your mind when you think of tax law? What does a day in the life look like for a tax lawyer? Today, we gather insights from Daniel Roy Mwamba, an Advocate of the High Court and Managing Partner and Tax Lead at MGW Advocates LLP, on tax law matters.

Daniel Roy Mwamba and His Passion for Tax Law

As highlighted above, Daniel Mwamba is a zealous tax lawyer. He’s passionate about enlightening the public and taxpayers on their rights as enshrined in the law. 

Mwamba aspired to become a lawyer since he was in primary school. It all started with defending his siblings from his mother’s wrath; she was very strict. Besides his instinct to defend people, Daniel drew inspiration from the crop of lawyers involved in the clamor for multi-party democracy. 

“My mom would buy copies of the Nairobi Law Monthly when it still belonged to Gitobu Imanyara. Gitobu Imanyara, Gibson Kamau Kuria, Kiraitu Murungi, were among the lawyers who inspired me.”

Roy undertook his LLB at the University of Nairobi and proceeded to KSL before returning to the University of Nairobi, where he earned his Masters of Laws degree. “Back on campus, I was very rebellious. I was involved in many controversies because I would not let anything that I felt was wrong slide.” Consequently, Daniel had disputes with several prominent names in the UoN law faculty. He has never shied away from putting his point across. “Sometimes I’m not very popular with some people because I don’t care for respectability.”

Nonetheless, Roy Mwamba was an ace in the classroom. One of his most memorable formative experiences was during his LLB days. He sat for a CAT with one question that only required a sentence for an answer, yet his fellow examinees wrote lengthy answers. He was the only person who got the question right and scored full marks on the test (this will make sense later).

Roy Mwamba’s legal career began with pupillage at the AG’s office. He worked there post-admission before venturing into legal entrepreneurship with a colleague from the AG’s office to establish MGW Advocates LLP.

Mwamba and his partner decided to settle on tax law based on market forces. His law firm, MGW Advocates LLP, has been handling tax matters within and beyond Kenya, including suing the Kenyan government in the East African Court of Justice and the COMESA Court of Justice. Spoiler alert: Daniel Roy Mwamba will feature in our next legal entrepreneur piece, so watch this space.

Back to the tax issue, according to Daniel, Tax Bills started to become unsustainable in 2016 when the government began making decisions that would cause market aberrations and lead to a negative economic cascade effect. However, the Finance Bill 2024 was the straw that broke the camel’s back.

Mwamba has this to say about tax law: “Only two things are certain, taxes and death- Benjamin Franklin. You may not manage to cheat death, but beating the taxman is a close second.” As a well-rounded lawyer with significant work experience in various practice areas, including commercial and constitutional law, Mwamba posits that tax law is among the most riveting areas of practice in the legal arena.

What Does Tax Law Entail?

Going against the tax bureaucracy requires special skill sets, a unique outlook, and much more. Here, Mwamba delves into tax law, including its highs and lows, the competencies required to succeed as a tax lawyer, and emerging trends in Kenya’s tax law arena.

• Litigation

The tax dispute process begins by filing an objection to a tax assessment before KRA within 30 days. Once KRA receives the objection, they must file an objection decision within 60 days, and you can appeal the objection decision at the tax tribunal. 

Both KRA and the taxpayer can appeal the decision arrived at by the Tax Appeals Tribunal at the High Court. Moreover, each party can appeal a High Court ruling at the Court of Appeal. Therefore, tax lawyers require sharp litigation skills to represent clients through the entire process. “There are no favors in tax law because everything you get you to work for. So, at the very least you must  establish litigation rigor.”

• Advisory

According to Daniel, businesses in Kenya willingly comply with the law if they can help it. Consequently, tax lawyers often offer clients advisory services to help them comply with prevailing tax legislation and prevent future tax disputes.

Mwamba highlights that advisory work in tax law features two elements: compliance and tax planning. Nonetheless, it all boils down to advising the client on impending legislation and giving actionable steps they can take to organize their affairs to limit liability.

• ADR

Daniel advises that as a tax lawyer, you should know when to fight and when to use ADR. ADR is a crucial tool in cases where a client fails to comply. In such instances, they must pay something, and ADR helps cushion them from punitive penalties as much as possible.

• Tax Audits

KRA’s mandate includes conducting tax audits to ensure compliance. A body of factors, including delays in submitting returns and claiming tax refunds, attract KRA’s scrutiny, causing them to initiate the tax audit process by issuing an intention to audit notice.

Your role as a tax lawyer includes guiding your client through the tax audit process through various actions, including handling correspondence with the KRA on the client’s behalf. Moreover, you must attend meetings between the KRA and the client to protect the latter’s interests and resolve any disputes arising during such sessions.

• Research

Each year, the Finance Bill proposes amendments to tax laws. Therefore, the tax position in Kenya is constantly changing. Moreover, the tax policies that shape tax law implementation also evolve. Therefore, research is crucial in keeping up with tax laws, policies, and significant rulings in tax matters.

• Tax Education

Besides offering advisory services to clients, tax lawyers also offer tax education to the general public through channels like legal alerts, seminars, and workshops. Such sensitization platforms help improve tax justice through citizen empowerment.

• Policy Advocacy

Tax lawyers’ knowledge allows them to lobby for better tax policies and advance clients’ or the citizenry’s economic interests. Tax lawyers can collaborate with industry groups, professional associations, and government bodies to develop and refine tax policies.

Bottom Line

Kenyans tend to view tax law as a sword yielded by the government, yet it’s also a shield that the taxpayer can use. Consequently, a lot of sensitization is needed regarding how taxpayers can achieve maximum benefits from tax laws. As a tax lawyer, that is where you come in. 

Watch out for part two of our Tax Law series, where we’ll explore the competencies of a tax lawyer. Moreover, we’ll cover the highs and lows of being a tax lawyer in Kenya.