The Mumias Sugar. FILE PHOTO | NMG
Troubled sugar miller Mumias owes the Kenya
Revenue Authority (KRA) more than Sh1 billion in unpaid taxes and
interest accrued, Parliament heard on Thursday.
KRA
commissioner-general John Njiraini told the National Assembly’s
Committee on Implementation that the agency has re-issued a demand
notice to Mumias seeking payment of taxes on exports that the company
made under former managing director Evans Kidero.
The massive tax bill was due from VAT payable on the exported sugar and accrued interest.
Mr
Njiraini said Mumias had failed to prove that it exported the
consignment even after making a declaration in KRA’s Simba System,
forcing the authority to believe that the sugar was dumped in the local
market
“We have demanded the tax and where we feel evidence is not
significant to prove fraud in court, we will levy tax and levy full
penalty,” the taxman said adding that failure to respond to the
re-issued demand notice in 30 days will lead to taking out the money
from the sugar firm’s bank.
“If we don’t get money in bank, we will auction their property,” said Mr Njiraini.
The
taxman said Mumias may have made the fictitious declaration to evade
paying the 16 per cent value added tax (VAT) charged on non-exported
products.
The committee had summoned Mr Njiraini for a
brief on measures KRA has taken to implement a resolution of the House
when it adopted a 2014 report of the Agriculture Committee on the Crisis
Facing the Sugar Sector.
MPs reckoned that the current
importation of contraband sugar said to contain heavy metals such as
copper and lead would not have occurred had the resolution been
implemented.
KRA was asked to explain why it had failed
four years down the line to hold its staff, who were responsible for
the loss of tax revenues amounting to Sh577 million, arising from
fictitious exports of sumakers that KRA made the VAT and sugar development
levy (SDL) assessments and demanded the taxes due from Mumias. “As we
are unable to trace the original demand, we have re-issued the demand.
The letter forwarding the easements together with copies of the
assessments and workings are annexed hereto,” Julius Musyoki, the KRA
Commissioner Customs and Border Control said.
The
explosive report on the sugar crisis which the House adopted in February
2016, did not directly indict any individual but recommended far
reaching actions against former management and board of Mumias Sugar.The
probe team recommended that KRA be held responsible for loss of Sh577
million VAT revenue through fictitious exports of sugar.
Parliament
then demanded that any person in the Mumias board and management or
working with KRA who facilitated the fictitious exports between 2006 and
2012 be held accountable for abuse of office.
Mr
Njiraini was also asked to explain why KRA allowed Mumias to import
10,000 tonnes of sugar when there was an oversupply of the commodity.
Mr
Njiraini said Mumias was licensed to import the sugar from Sudan’s
Kenana but mandated Dantes Peak Limited to import on its behalf through
an agreement for supply.
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