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National Cereals and Produce Board creditor spared Sh156m security

By BY PAMELA CHEPKEMEI | June 27th 2013 at 00:00:00 GMT +0300


Kenya: A court has declined to order a company that won a Sh500 million case against the National Cereals and Produce Board to deposit security for tax.

The Kenya Revenue Authority (KRA) had asked the High Court in Nairobi to order Erad Supplies Ltd to deposit Sh156 million as tax security, but a judge declined to grant the orders.

In refusing to grant the request, High Court Judge Weldon Korir said KRA has not established any grounds to warrant the imposition of new conditions on Erad.

“An applicant is required to place before the court information, which may have been overlooked at the time leave was granted,” said the Judge.

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The chief taxman had asked the Court to order Erad, which it accuses of tax evasion, to deposit security in a case where a judge stopped it from accessing some Sh297 million in a bank account to recover tax arrears.

The money being pursued by the KRA is part of the Sh514,911,109 NCPB was ordered to pay Erad Supplies Limited. KRA told the court Erad Supplies should provide a guarantee because it has no known assets from which it can recover the tax in the event that the amount is not remitted to KRA.

KRA further claims that the company, which obtained orders against NCBP for payment of Sh514 million has been filing nil tax returns and has not been voluntarily declaring any income from its business.

Erad supplies declared nil returns from 2007 to 2010 according to KRA. However, Erad Supplies has denied having any tax arrears.

The taxman accuses three directors, of the company, John Waluke, Grace Wakhungu Sarapay, and Jacob Juma of failing to remit tax returns.

“The three who are the directors of Juma Construction Company Ltd, have equally not been paying taxes thus putting revenue at risk from their conduct,” says, Peter Wanjohi, a KRA officer.

KRA is laying claim to Sh156 million as unpaid taxes from Erad Suppliers. On March 27, 2013, the High Court ordered Kenya Commercial Bank to release Sh297 million to Erad Supplies. KRA subsequently issued agency notices demanding tax arrears of Sh156 million from the company.

National Cereals and Produce Board NCPB High Court
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