- The auditor general says KRA did not adequately explain why it did not destroy the sugar
- KRA was recently indicted by a committee of Parliament over the same issue
Image: DCI
A new audit review has indicted the Kenya Revenue Authority for irregularly releasing expired sugar to the market.
Auditor General Nancy Gathungu says the taxman takes the fall since the goods were at its premises when they went missing.
In the latest review of KRA books as of June 30, 2023, the auditor says the authority did not adequately explain why it did not destroy the sugar.
“No explanation was provided by management for releasing expired goods to the market instead of destroying the same,” the auditor general said.
KRA, she said, violated the law which requires the destruction of goods detained "for being in a dangerous state or injurious to the health of human beings, animals, or plants".
“In the circumstances, the management was in breach of the law,” the report reads in part.
Kenya Bureau of Standards Act, Cap 496, states that an inspector may order the destruction of such goods.
It is emerging that KRA released two sets of condemned sugar, the first being 240 bags of 50kg that were intercepted.
Gathungu said her review established that while only 18 bags were sent to the Kebs as expired, the entire consignment was later found to be past its due date.
The sugar was indicated as manufactured in March 2017 and had an expiry date of February 2020, but was released a month later, on March 25, 2020.
A second batch had 2,700 bags of sugar 50 kilos each - of unknown value, which were deposited in the customs warehouse pending investigations.
Kebs was to issue a report of its analysis on the sugar.
Gathungu reports that of the quantity, 158 were released to Nairobi for destruction in January 2020, leaving the remaining 2,542 bags in the warehouse.
The auditor general says a physical inspection of the warehouse revealed that the bags were missing.
“Their whereabouts were not explained,” Gathungu said, adding that the taxman broke the law and magnifying concerns about how 'poisonous' sugar keeps finding its way to consumers’ cups.
“This was contrary to Section 26 (2) of the East African Community Customs Management Act, 2004, which states that the owner of the transit shed shall be responsible and accountable for the goods,” the auditor said.
The report further reveals that the authority irregularly released bottled water which was deposited at its warehouse in Isiolo.
While the station management indicated that the goods were released following email authorisation from the domestic tax department enforcement team, having confiscated the goods, the audit established the contrary.
Gathungu says no reasons were indicated for confiscation of the goods, penalties and charges preferred on the taxpayer and penalties collected or even reasons for the release of goods.
The report comes hot on the heels of another recent finding by a National Assembly committee that KRA officials may have aided the release of some 20,000 bags of condemned sugar.
The Trade Committee recommended that the EACC investigate how the authority's officials allowed an unlicensed company to destroy condemned sugar which later found its way to the market.
The committee, chaired by Embakasi North MP James Gakuya, implicated KRA, the Kebs, Nema and the Agriculture and Food Authority, accusing them of sleeping on their jobs.
The agencies were part of the team that was to oversee the destruction of the sweetener after it was condemned for failing basic tests.
“The committee finds the three institutions, Nema and AFA-as the most responsible, as they had a major supervisory role to the final distillation process,” Gakuya said.
The 20,000 bags of sugar of 50kg each were shipped from Zimbabwe to Mombasa on June 30, 2018, but mysteriously disappeared from a warehouse in Thika.
The sugar had been rejected by Kebs after failing the standards, including for lacking details like the date of manufacture.
A firm trading as Vinepack Limited was given the go-ahead by KRA to convert it to ethanol for industrial use and not for human consumption.
MPs held that KRA's decision to award the contract to the firm was suspect, as the company was not licensed to carry out distillation by the Sugar Directorate.
“There was no proof even on the part of Vinepack Limited that the company was duly licensed by the Sugar Directorate,” the report read.