KRA ordered to allow off-loading of sugar worth Sh2.6 billion at Mombasa port

The Kenya Revenue Authority has been ordered to allow an importer to offload 800,000 bags of duty-free sugar worth Sh2.6 billion from a ship that docked at the port of Mombasa last month.

Justice Erick Ogola ordered the sugar aboard MV Iron Lady ship from Brazil be offloaded and stored at JB Maina private warehouse after he rejected an application by KRA to have offloading of the sugar suspended.

"After careful consideration of the submissions of the parties, I'm satisfied that the earlier order issued on December 27 has to be obeyed,” said Justice Ogola.

Lawyers for KRA applied for the review of the order of December 27, 2017 in which Darasa Investments was given an ex-parte order to have its sugar off-loaded from the vessel that arrived in Mombasa early December from Dubai.

KRA had complained that the court erred in giving the order to have the sugar offloaded to a private warehouse and yet it had some custom bonded warehouses inside the port.

They complained that the release of sugar to the private warehouse was an avenue for the sugar to be stolen, which could make the country lose taxes.

But Darasa company's lawyer Daniel Mosota said KRA did not have enough warehouses to keep the sugar in question.

Bonded warehouse

Mr Mosota said some of the warehouses in the port were depleted and could not be entrusted with the storage of the sugar.

In his ruling, Justice Ogola said since the order he had made was from the court, the private warehouse had automatically become a bonded custom warehouse.

KRA should now organise security for the sugar in question.

He also declined to give another stay after KRA asked for seven days to enable them appeal.

In 2016, the Government licensed 40 firms to import sugar.

The regulator, formerly known as the Kenya Sugar Board, had suspended the issuance of import permits in January to check against excess supply of the commodity.