Chinese firm, State ministries identified as beneficiaries of illegal tax waivers

The Country lost over Sh200 billion ahead of 2022’s elections due to illegal tax waivers, abandonments and exemptions to individuals and companies of power individuals connected to the State.
The Parliamentary committee on finance and national planning now says the National Treasury and Kenya Revenue Authority (KRA) are responsible for the losses.
The committee issued KRA with a seven-day ultimatum to supply it with the list of all individuals and companies that benefited from the waivers.
This emerged during a highly charged meeting between members of the committee and senior officers from KRA in Lake Naivasha Simba Lodge.
During the meeting, it emerged that the Treasury, which was supposed to support revenue collection, would give waivers, exemptions and abandonments despite opposition from the KRA.
According to the committee chairman Kimani Kuria, the country fails to meet its budget projections every financial year due to illegal waivers and exemptions.
Addressing the press at the sidelines of the meeting, Kuria said that the majority of the waivers, exemptions and abandonments were conducted between 2021 and 2022.
The Molo Mp noted that among the beneficiaries were some government ministries, a Chinese company, individuals and organizations that influential individuals ran in the country.
The outspoken Mp pointed an accusing finger at the Treasury for ignoring advice from KRA and giving abandonments even on PAYE, excise duty and VAT.
During the meeting, the committee took issue with a contract between KRA and a foreign company on printing excise stamps.
Kuria said that the country lost Sh4.1 billion with the foreign contractor charging Sh1.80 for a stamp only for KRA to sell the same at 50 cents.
Kesses Mp Julius Ruto, a committee member, said that the country lost over Sh200 billion through tax waivers.
Ruto noted that the Ministry of ICT was among the beneficiaries of the exemptions in a multi-billion project involving a Chinese company.
The Mp noted that due to the illegal exemptions and waivers, the government had challenges meeting its budget expectations leading to higher taxes among mwananchi.
He said there were cases where one organization was given a waiver of Sh14B leading to a fallout between KRA and the Treasury.
Ruto revisited the duty stamp tender adding that they would investigate deeper to know the beneficiaries and why a foreign company was sourced for the contract.

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