The Kenya Revenue Authority has dismissed claims that it may have lost tax revenue estimated at Sh64 billion through misdeclaration of crude palm oil cargo at the port of Mombasa.
In an ongoing probe involving palm oil shipments that entered the country between March 2023 and June 2024, members of parliament claimed that they received intelligence that there was a misdeclaration of cargo at the port.
The probe by the National Assembly Finance and Planning Committee has cast its spotlight on three companies: M/S Acee, M/S Mazeras Oil Limited, and Vipingo Industries Limited.
The committee has asked KRA to provide details of the total volume of palm oil imports handled by LDC Asia PTA through the Port of Mombasa between February 23, 2023, and June 2024.
This included volumes of RBD Palm Stearin, Crude Palm Kernel Oil, Crude Palm Olein, Crude Palm Oil, and Crude Palm Fatty Acid Distillate. Additionally, they want information on the total taxes and fees paid by the company during this period. During the probe, the committee chair, who is also the Molo MP, Kuria Kimani, sought to know why KRA cleared cargo imports that had been declared as crude palm oil, yet it was refined.
KRA Deputy Commissioner, of Investigations and Enforcement, Levi Mukhweso, in defence of the tax authority, said that tests conducted on the said shipments showed that they met local crude palm oil import standards.
“Concerning this matter, KRA is satisfied that it has been following all due diligence as outlined in the customs procedures and tax laws. Based on its assessments, KRA has collected all relevant taxes required, considering factors such as product description, tariff classification, product quantity, product value, and country of origin,” said Mukhweso during submissions to the committee.
He added that KRA, therefore, collected the requisite revenue in compliance with the law.
“We commit to provide to the Committee with any other relevant information that may be required regarding the matter,” he added.
Kenya, KRA Commissioner General, Humphrey Wattanga also maintained that no tax revenue was lost as Louis Dreyfus Company (K) Ltd did not import any products directly into the market, adding that taxes on the products it imported were declared by the local and regional companies it sold the products to.
“M/S Louis Dreyfus Company (K) Ltd does not import any products directly into the market but sells to local and regional companies for declaration into home use and/or transit.,” he said.
He further indicated that a total of 546,588.86 Metric Tonnes (MT) of Crude Palm Oil (CPO), Crude Palm Olein (CPOL), Crude Palm Oil Kernel (CPOK), RBD Palm Stearin (RBDPS) and Palm Fatty Acid Distillate (PFAD) was exported into and through Kenya by Louis Dreyfus Company Asia PTA between 23rd February 2023 and 26th June 2024.
Baringo North MP Joseph Makilap sought to know what prompted the authority to undertake tests on some of the consignments that are under probe.
“Did you have a load declaration on the cargo that was landing at the port? And what warranted the suspicion that made you go ahead and conduct tests on this specific consignment?” asked Makilap.
He added that the load survey full report showed that the goods declared were refined palm oil. KRA however maintained that tests done by KEBS and its internal testing laboratory showed that the shipment was crude palm oil.
Between February 2023 and June 2024, six local companies imported a total of 315,138.38 metric tons of products from M/S Louis Dreyfus Company Asia PTA Limited. Of this total, four companies—M/S Louis Dreyfus Company Kenya Limited, M/S Acee Limited, M/S Mazeras Oil Limited, and Vipingo Industries Limited—accounted for 240,044.74 metric tonnes of imports.
Acee Limited imported 9,255.34
metric tonnes, paying Sh263.77
million in taxes, Mazeras Oil Limited brought in 15,270.58 metric
tonnes, contributing Sh557.77 million in taxes and Vipingo Oil Industries Ltd imported the largest
volume, 137,724.29 metric tonnes,
and paid Sh3.73 billion in taxes.