Auditor-General Nancy Gathungu. PHOTO | LUCY WANJIRU | NMG
Top companies, including some listed at the Nairobi bourse, have failed to pay more than Sh1 billion in levies and royalties to the government for mining raw materials for products such as cement, carbon dioxide and soda ash.
The East African Portland Cement
, Magadi Soda Company, Carbacidand Savannah Cement top the list of firms that have defaulted on royalty payments, says Auditor-General Nancy Gathungu in the report covering period to June 2019.
In the report, Ms Gathungu says some of the firms have defaulted on commitments to settle the arrears stretching between two and five years back while others have contested the bills presented to them by the ministry which is also being accused of not making enough effort to collect the pending payments.
The auditor noted that the Ministry of Mining could not explain why it had failed to collect Sh280.3 million in cement levies from EAPCC for the last five years even as the firm failed to file its self-declaration assessment in 2019, essentially making it impossible for the ministry to determine how much in cement levy was due for collection.
Savannah Cement Ltd had also failed to remit Sh285.6 million in cement levies since 2017 despite having committed to clear the arrears in 24 months.
“The company had since contended that it has no mineral rights granted by the Ministry and is therefore not liable to pay. Evidence of the State Department's effort to enforce the payment plan or seek the opinion of the Attorney General on the matter was not provided,” Ms Gathungu wrote.
Collection of cement levies missed target by Sh2.9 million in 2019 while royalties failed to hit even half the target of Sh150 million set by the ministry.
The audit found that soda ash mining firm, Magadi Soda Company had not paid Sh438.6 million in royalties since 2015 and there was no guarantee the ministry would collect the money despite having engaged the firm over the same.
Carbon dioxide manufacturer Carbacid Limited had also expressed reservations on paying Sh30.5 million it has owed the ministry in royalties since 2017.
Another Sh11.5 million mining royalty had not been settled by Africa Diatomite Industries despite commitments to pay the amount.
A number of firms including seven salt miners, three gold exporters and 29 gemstone exporters were also found to be operating without mining, export or dealer’s permits under the watch of the ministry.
The illegal operators were found through data comparison with the Kenya Revenue Authority which revealed exports of minerals by persons and companies who according to the Mining Department's data were not holders of valid export, mining or dealers’ permits.
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