The Departmental Committee on Finance and National Planning has directed Kenya Revenue Authority to provide details including the cargo manifest and the loading survey report relating to 16 shipments of oil made between March 2023-May 2024.
This is after the Hon. Kuria Kimani-led Committee cited information gaps in documents provided before the Committee relating to a probe the lawmakers are undertaking on tax compliance on importation of crude oil in the country.
While giving the directions, Hon. Kimani underscored the need to have all the documents relating to cited oil imports availed to confirm that all taxes relating to the imports and to also ascertain that whatever load was declared was actually what had been imported and distributed to edible oil companies in the country.
“During public participation exercise on the Finance Bill, 2024, stakeholders among them the Kenya Manufacturers Association told us that unscrupulous importers were importing refined edible oils in the name of crude palm oil. We therefore need to ascertain that what was declared is indeed what was imported”, Hon. Kimani stated.
The Kenya Revenue Authority officials led by the Commissioner General Mr. Humphrey Watanga were appearing before the Committee to provide information regarding cargo imported by M/S Louis Dreyfus Company Asia PTA Ltd and M/S Louis Dreyfus Company (K) Limited into and through Kenya.
This is in relation to suspected loss of tax revenue estimated at Kshs. 64 Billion through misdeclaration of Cargo imported by Ms. Louis Dreyfus Company Asia PTA Limited and Ms. Louis Dreyfus Company Kenya Limited, which the Committee is investigating.
According to the Commissioner General Watanga cargo M/S Louis Dreyfus Company Asia PTA Ltd was the consigner/exporter of the products and therefore did not pay tax.
“ M/S Louis Dreyfus Company (K) Limited imported the products, entered them for warehousing and later sold to local and regional companies for declaration into home use (thereby paying requisite taxes) and/or transit”, the Commissioner General explained.Details in KRA’s submissions indicated that of the total quantities of the products imported, 163,103.57MT was consigned to M/S Louis Dreyfus Company (K) Ltd for sale to local companies who later declared the products for home use and paid taxes.
According to the law,the importation of Crude Palm Oil under HS Code 15111000 is exempt from Import Duty and Excise Duty.
However, importers are still required to pay 16% Value Added Tax (VAT), 1.5 per cent Railway Development Levy (RDL), and 2.5 per cent Import Declaration Fee (IDF).
Based on the documents submitted by KRA, there was no indication that Mazeras Oil Ltd and Mvita Oil Ltd made the required tax payments for their imports made from March 2023- June 2023.
Documents provided show that a total of Kshs. 4,549,936,372 in taxes was paid by the three companies; Acee Limited, Mazeras Oil Ltd and Vipingo Industries Limited,from the imports.
The Committee is set to meet the Kenya Revenue Authority before inviting other witnesses to shed more light on the matter.
