Questions on Swiss contractor haunt Sh17b tax stamps tender

KRA failed to get approval from Parliament as per court ruling

Unresolved questions on the Swiss firm which clinched a Sh17.7 billion tender to print security revenue stamps for Kenya Revenue Authority (KRA) continue to haunt the taxman.

Even as the stage is set for KRA to face activist Okiya Omtatah in the Court of Appeal over the tender for Sh1.50 stamps to be applied on soft drinks and lipstick, questions linger on the Swiss firm’s suitability.

Sicpa Security Solutions SA Limited, a security documents technology firm, may have been banned from Brazil over alleged inflated prices for a similar project.

The firm initially signed the contract with Kenya in December 2012 at a cost that was later renegotiated and increased.

The five-year contract worth 42 million euros (approximately Sh4.8 billion at today’s exchange rate) was originally to provide 3.55 billion stamps a year but this was later increased to 158 million euros (Sh18 billion) for 12.87 billion stamps.

Questions linger on how the taxman did not know whether the firm had unresolved shadows overseas.

In March 2009, Brazil sought the services of Sicpa to make stamps for control of the cold beverages industry, in particular beer and soft drinks, to enable the counting, identification and type of packaging of the various brands produced in the country.

The firm was directly hired, which raised suspicions of irregularities said to have been effected without following the respective bidding procedure.

After a few years, and with the imminent termination of the agreement, new bidding procedures were initiated.

Suspicions then emerged that representatives of Sicpa may have corrupted public servers to obtain and subsequently renew the billion-dollar contract.

KRA Commissioner General John Njiraini was questioned by Parliament’s Public Investment Committee (PIC) on the same firm over the Brazil saga in 2016.

Centre of battle

These are the same questions that are at the centre of the battle between Omtatah and KRA.

In his court papers, the activist argues that KRA ignored PIC’s directive to suspend the implementation of EGMS system to allow the committee to finalise its investigations into alleged irregularities in the award.

The original contract was for making excise stamps for tobacco products, wines and spirits but the Treasury in June 2013 increased the scope to cover beer, bottled water and soft drinks.