The National Assembly has summoned the Kenya Revenue Authority (KRA) Commissioner-General Humphrey Wattanga over claims that the country lost Kes 62 billion in a tax evasion scandal involving two oil companies.
The firms include Louis Dreyfus Company (LDC) Asia PTA Limited and Louis Dreyfus Company Kenya (LDC) Limited after details emerged of the misdeclaration of palm oil cargo imported by the two companies over three years.
The Finance and National Planning Committee of the National Assembly, chaired by Molo MP Kimani Kuria, wants Wattanga for a grilling session.
In the summons sent to the KRA boss on August 29, 2024, the committee raised seven particulars that it wants to be clarified during a session with MPs.
“From the foregoing and the importance of revenue mobilization in the country, the Committee resolved to invite you for a meeting to shed light on the matter,” the letter by Senior Deputy Clerk Jeremiah Ndombi on behalf of the Clerk of the National Assembly Samuel Njoroge, reads in part.
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Documents before the committee show that the product imported by LDC companies, whose intended use is in Kenya and the other East African countries using the port of Mombasa for imports, is mis-declared in two ways.
First, the product consists of 60 percent crude palm oil and 40 percent refined palm oil, which is then declared crude palm oil.
Alternatively, the product is largely imported in refined form but declared as crude palm oil at the port of Mombasa to evade the 35 percent import duty or USD500 charged per tonne.
The product also attracts a 2.5 percent Import Declaration Fee (IDF), a 1.5 percent Railway Development Levy, and a 16 percent Value-Added Tax (VAT).
In Kenya, 35 percent duty is charged on imported refined palm oil, with semi-refined palm oil attracting 10 percent duty.
To investigate the matter, the committee wants Mr Wattanga to provide details on the total cargo volume of palm oil imported by LDC Asia PTA through the port of Mombasa between February 23, 2023, and June 26, 2024.
The Committee also wants Wattanga to provide details regarding the total taxes and fees paid by LDC Asia PTA in the importation of the palm oil cargo from February 23, 2023 and June 26, 2024.
Copies of all import declaration documents, which are not limited to port health reports, Kenya Bureau of Standards (KeBS) reports, bills of ladings, and cargo manifests for all the 120 cargo of palm oil imported by the company from February 23, 2023 and June 26, 2024 are also required.
The committee also requires a list of consignees for all the palm oil cargo volumes imported by the company during the period.
Further, the committee also details the cargo volume of RBD Palm Stearin, Crude Palm Kernel Oil, Crude Palm Olein, Crude Palm Oil, and Crude Palm Fatty Acid Distillate imported by LDC- Kenya Limited, Acee Limited, Mazeras Oil Limited, and Vipingo Industries Limited through the port of Mombasa from February 23, 2023 and June 26, 2024.
He is also required to provide details of the taxes and fees paid by LDC- Kenya limited, Acee limited, Mazeras Oil limited and Vipingo Industries limited in the importation of the palm oil products between February 23, 2023 and June 26, 2024.
We require copies of all import declaration documents for palm oil cargo by LDC—Kenya limited, Acee limited, Mazeras Oil limited, and Vipingo Industries limited through the port of Mombasa between February 23, 2023, and June 26, 2024.
The committee stated that the copies should not be limited to port health reports, KeBS, SGS reports, bills of lading, and cargo manifests.
