KRA denies Sh64 billion tax loss in crude palm oil misdeclaration

The Kenya Revenue Authority (KRA) has rejected allegations of a Sh64 billion tax loss related to the misdeclaration of crude palm oil cargo at the Port of Mombasa.

This comes amid an ongoing investigation into palm oil shipments that entered Kenya between March 2023 and June 2024, after claims from Members of Parliament regarding possible misdeclarations.

The National Assembly's Finance and Planning Committee is focusing on three companies: M/S Acee, M/S Mazeras Oil Limited, and Vipingo Industries Limited.

The committee had requested KRA to provide details about the total volume of palm oil imports handled by LDC Asia PTA during this period, including various types of palm oil products and the associated taxes and fees paid.

Committee chair Kuria Kimani, the MP for Molo, on Thursday, questioned why KRA approved imports labelled as crude palm oil when they were reportedly refined.

In response, KRA Deputy Commissioner for Investigations and Enforcement, Levi Mukhweso, assured the committee that tests confirmed the shipments complied with local crude palm oil import standards.

"Concerning this matter, KRA is satisfied that it has been following all due diligence as outlined in the customs procedures and tax laws," Mukhweso stated.

He emphasised that KRA collected all relevant taxes based on product description, classification, quantity, value, and country of origin.

Kenya Revenue Authority Commissioner General Humphrey Wattanga. (Photo: KRA)

KRA Commissioner General Humphrey Wattanga echoed this sentiment, clarifying that no tax revenue was lost because Louis Dreyfus Company (K) Ltd. does not directly import products into the market.

Instead, it sells to local and regional companies, which are responsible for declaring the products for home use or transit.

Wattanga detailed that between February 23, 2023, and June 26, 2024, Louis Dreyfus Company Asia PTA exported 546,588.86 metric tonnes of various palm oil products into Kenya.

Baringo North MP Joseph Makilap raised concerns about the authority's decision to conduct tests on certain consignments.

"Did you have a load declaration on the cargo that was landing at the port? What warranted the suspicion to conduct tests on this specific consignment?" he asked, referring to reports suggesting that some goods declared were refined palm oil.

In response, KRA maintained that tests from both the Kenya Bureau of Standards (KEBS) and its internal laboratory confirmed the shipments as crude palm oil.

From February 2023 to June 2024, six local companies imported a total of 315,138.38 metric tonnes of products from Louis Dreyfus Company Asia PTA Limited. Notably, four companies Louis Dreyfus Company Kenya Limited, Acee Limited, Mazeras Oil Limited, and Vipingo Industries Limited accounted for 240,044.74 metric tonnes of these imports.

Specifically, Acee Limited imported 9,255.34 metric tonnes, paying Sh263.77 million in taxes, while Mazeras Oil Limited brought in 15,270.58 metric tonnes, contributing Sh557.77 million.

Vipingo Industries Limited imported the largest volume at 137,724.29 metric tonnes, with taxes amounting to Sh3.73 billion.