Mumias Sugar Company owes Sh1.13 billion for failing to pay taxes on sugar imports, the national revenue agency has said.
Kenya Revenue Authority (KRA) Commissioner General John Njiraini yesterday told a parliamentary committee that six years ago the miller imported sugar from Sudan purporting it was for export, but the product ended up in the local market.
He explained to members of the National Assembly's Committee of Implementation that the agency's investigations established that Mumias, which imported the sugar through a third party, evaded paying taxes amounting to Sh577 million.
Mr Njiraini said the company was asked to pay the taxman Sh577 million in unpaid value added tax after the anomaly was detected.
According to the KRA boss, the amount since 2012 had accrued interest and now stood at Sh1,138,663,714.
“The amount they (Mumias Sugar) owe KRA is now Sh1.13 billion. We wrote to them on July 10 asking them to pay us within 30 days. If they do not respond to our notice, we will be compelled to go to the bank and take their money,” said Njiraini.
The sugar company has been struggling to stay afloat despite the State's decision to pump into it Sh2.5 billion.
According to the management of the cane factory, it requires Sh10.5 billion to be fully revived.
The House team is tracking the implementation status of the sugar crisis report of the Agriculture Committee of the last Parliament.
The committee, which investigated what was ailing the sugar industry, recommended that officials of Mumias Sugar Company, at the time headed by Evans Kidero, and KRA should be punished.
“Officers from Mumias Sugar Company/KRA who abused import procedures with regard to import permit requirements in the importation of 10,000 metric tonnes of sugar in 2012 from Sudan be held to account for their misdeeds," reads the report.
The Mumias management in 2012 identified Dantes Peak Limited, a company that specialises in sugar importation, to ship in the commodity on behalf of the company. The board in February 2013 gave the go-ahead for the importation.
Yesterday, Moitalel ole Kenta (Narok North),the chairman of the parliamentary committee, and members Richard Onyonka (Kitutu Chache South) and Godfrey Osotsi (nominated) asked why KRA could not establish from the onset that the firm that imported the sugar on behalf of Mumias was sold locally, evading paying millions in taxes.