Court of Appeal criticises KRA in Sh355 million rice import duty matter

The Kenya Revenue Authority has been criticised for erroneous calculation of import tax.

Appellate Judges Alnashir Visram, W Karanja, and MK Koome said the authority makes mistakes in its calculations on the duty, then shifts the burden and pressure to importers.

The judges said in Mombasa that the Kenya Revenue Authority (KRA) should change the way it operates and demands tax from importers.

“Your story is that KRA is under pressure and you are making deliberate mistakes and the importers pay for the mistakes. You are intimidating and harassing the importers, yet you are a Government body. You are behaving badly and you need to change,” said Justice Visram.

The judges were referring to a case where KRA is demanding over Sh355 million in duty from Krish Commodities Limited, which imported 10 containers of Indian and Vietnam rice in 2008.

Justice Karanja said KRA was collecting money that was not even due for collection.

"Demanding Sh355 million within 14 days is enough to send someone to the intensive care unit. This is not fair and you follow it up with threats,” she said.

“The wrong calculations are your mistake and KRA does this so that the importers can come to your offices so that you can negotiate,” said Visram

KRA lawyer Pius Nyagah said KRA was working hard to eliminate such errors and had summoned Krish to discuss the issue.

The Krish lawyer, Sanjeev Kagram, told the Court of appeal that KRA made a deliberate mistake on the tax his client was supposed to pay to compel him to visit its offices.

Mr Kagram said KRA unlawfully detained 10 containers on account of the allegedly underpaid duty.

“KRA has written to Krish on several occasions demanding a sum of Sh26, 215,578 on the account of duty allegedly uncollected due to application of a lower duty rate,” he said.