The Kenya Revenue Authority yesterday disclosed the events that led to the poisonous sugar being irregularly released, resulting in a purge this week that saw 27 state officials from 11 government agencies suspended.
KRA yesterday said the sugar, which had been released to a Thika-based alcoholic beverages manufacturer Vinepack Industries Limited but could not explain how it disappeared shortly after delivery to a storage facility affiliated with Vinepack.
The taxman however tried to absolve itself from any wrongdoing in regards to the disappearance of the sugar, saying the authority’s mandate lapsed once the sugar was handed over to Vinepack.
Rispah Simiyu, acting Commissioner General KRA said the taxman, together with other state agencies – which formed a multiagency team to deal with the condemned sugar – had overseen the delivery of the sugar to the Vinepack facility at Thika. The firm was to destroy the sugar by distilling it into industrial ethanol.
Once at Thika, the management of Vinepack said they did not have adequate storage capacity and instead said an associate firm – Kings Commodities – which is in close proximity to Vinepack would store the sugar.
“Upon arrival at Thika, the firm said it did not have enough storage but had storage offsite… the fact that goods would not be offloaded offsite had not been disclosed,” said Simiyu, who appeared before National Assembly’s Committee on Commercial Affairs and Energy.
She said while excise duty had been paid, the customs value had not been paid, which had been put at Sh1,000 per bag, which was demanded when the goods were delivered to Vinepack. It is then that while pushing the firm to pay, certain things started emerging, including the fact that the multi-agency team that was to oversee the distillation of the sugar to ethanol could no longer trace consignment.
Nearly all of the one million kilogrammes had disappeared, save for some 14 bags that have reportedly been recovered.
"When we asked for payment, all these things came to the fore. The next thing was a call informing me that the sugar delivered to Kings Commodities was missing,” she said.
Simiyu explained that before, the process of destroying condemned goods was straightforward and largely overseen by Kebs and the National Environment Management Authority, the latter determining how and where it would be destroyed.
The process has however changed and is currently run by a multi-agency team comprising different government agencies. The team also includes the Directorate of Criminal Investigation.
“All these agencies had to give a nod before destruction,” she said, noting that the upside of a larger team was to ensure things were done in the right manner and left no loopholes.
It is through discussions at the multiagency team and the involvement of the Attorney General that it was agreed that the sugar be destroyed through conversion to ethanol.
Simiyu said after the decision to convert the sugar to ethanol, KRA demanded that if it is being distilled into industrial ethanol, then it is raw material and hence duty had to be paid for.
“KRA’s role was to ensure if this sugar is released, then the duty was paid,” she said.
The sugar was condemned by Kebs in 2018 for among other things failure to have expiry dates on the packages.
The irregular release in April this year resulted in the suspension of 27 state officials from 11 government agencies, including Kebs managing director Bernard Njiraini.
State House on Wednesday said the Cabinet Secretaries for National Treasury and Trade and Industry had suspended 27 officials from 11 different state agencies for failure to follow through with the destruction. The majority of the 27 officials are from the KRA and Kebs.
“The sugar consignment, comprising 20,000 bags (50kg), had been imported into the country in 2018 and condemned by Kebs for want of expiry date specification. Kebs condemned the consignment as unfit for human consumption and directed that the consignment be reshipped and destroyed at owner's costs,” said the statement by Felix Koskei, President Ruto’s chief of staff and head of public service.