A Case for an Objective Threshold in Tax Exemption of Persons with Disabilities in Kenya

by | Feb 13, 2023

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About George Gor

George Gor is a Legal Researcher at Kabarak University School of Law in Nakuru, Kenya. He is currently a Research Intern at the National Council for Law Reporting (Kenya Law). George has a keen interest in comparative constitutional law, human rights law, bioethics and reproductive technologies, and artificial intelligence governance in the healthcare sector. He is also a member of the African Network of Constitutional Lawyers.

Image Description: A Kenyan mother and her daughter are pictured close-up on their faces. The mother looks toward the camera while the child gazes elsewhere. The daughter has a developmental disability

The Persons with Disabilities Act 2003 (PWD Act) and the Deductions and Exemptions Order 2010 establish the framework for tax exemption of people with disabilities (PWDs) in Kenya. This form of tax relief seeks to ensure that, despite the deplorable state in which PWDs may be living in, they ostensibly have the ability to support themselves and cater for the extra cost of materials and devices concomitant to their disability. However, the legal framework for tax exemption of PWDs does not provide for a clear threshold for determining eligibility of applications for or renewal of a tax exemption certificate; nor is such a threshold disclosed to PWDs during the application or vetting process. Thus, determination of whether or not an application for or renewal of an exemption certificate is successful is solely based on the discretion of the National Council for Disabilities (NCPWD) and Kenya Revenue Authority (KRA) – the two government bodies responsible for determining one’s eligibility for tax exemption.

While the tax exemption framework aims to alleviate economic uncertainties that PWDs face in Kenya, it has ended up exacerbating the violation of their rights. The subjective nature of the threshold for eligibility for tax exemption impedes PWDs’ rights to fair administrative action, access to information and adequate standard of living as envisioned under Article 54 of the Constitution of Kenya 2010,  the United Nations’ Convention on the Rights of Persons with Disabilities (CRPD) and the African Disability Protocol. There are two judicial review avenues that an aggrieved person whose tax exemption certificate has not been renewed by the NCPWD and KRA may pursue: first, through constitutional judicial review where an aggrieved party approaches the High Court, claiming violation of their constitutional rights; and secondly, through judicial review of administrative actions where one can approach the court to determine the propriety of the decision of the NCPWD and KRA under the auspices of the Fair Administrative Actions Act 2015. Of these two avenues, the latter is more expedient due to the established time limit of ninety days. On the other hand, constitutional petitions may take a long time before a decision is made. As such, recourse is often sought through the avenue of judicial review of administrative actions.

The ambiguous legal framework for determining the threshold for tax exemption abrogates authority to the NCPWD’s and KRA’s discretion. Finding fault in the NCPWD and KRA’s decision to deny the Applicant a tax exemption certificate, the High Court in Republic v National Council for Persons With Disability; Ex-Parte BNB (2020) eKLR, issued an order of mandamus, compelling the two government entities to issue the Applicant with a tax exemption certificate. Conversely, the High Court in Republic v National Council for Persons With Disability & Another: Ex Parte Margaret Atieno Odiembo (2022) eKLR argued that inasmuch as the Applicant had a justiciable case against the two government entities, an order of mandamus – a judicial review remedy used to compel a party to act in accordance with the law – could not be issued since the NCPWD and KRA were authorised to exercise complete discretion in deciding the eligibility of a PWD for tax exemption. These cases illustrate the difficulty of adjudicating disputes involving the denial of renewal of tax exemption through judicial review of administrative actions.

The obvious solution to this issue is a legislative response which clarifies the threshold for determining the eligibility of a PWD for tax exemption. Since the state also has the mandate to collect taxes from the income of its citizens, it would be erroneous to place an obligation on the state to exempt all persons with disabilities from payment of tax. Factors such as severity of the disability and extent of impact to one’s livelihood ought to be considered. As such, Parliament should amend the PWD Act and the Deductions and Exemptions Order to ensure that there is a clear legal framework that establishes an objective threshold for the tax exemption of PWDs. Such a step would help to secure the rights of PWDs to an adequate standard of living and to access to their necessary resources.

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