KRA accuses Standard newspaper of fabricating numbers

Kenya Revenue Authority (KRA) has lashed out at Standard Media Group for running a report that made claims which according to the taxman were “baseless and factually inconsistent with reality”.

A press statement from the office of KRA’s Deputy Commissioner – Marketing and Communication Ms. Grace Wandera also accused the media house of fabricating a sum of money in relation to a contractual agreement between KRA and Swiss-based security solutions firm, SICPA (Société Industrielle et Commerciale de Produits Alimentaires).

“The claim of a non-existent sh81 billion contract is therefore fabricated and unworthy of a reputable media house,” the statement reads in part.

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The tax authority says that less than 25% of the initial tender’s sum of Ksh17 billion has been utilised. “In relation to the tender sum , the 5-year contract with SICPA provided for a maximum figure of approximately Euro 153 million (approximately sh17 billion at the point of contracting). This was a framework contract on which the amount paid depends on the stamps and related services delivered. Since inception in 2015, only 24.6 % of the initial tender sum has been utilized.”

KRA’s reaction is in response to a story that appeared in The Standard on Sunday in which the taxman was linked to a Ksh81 billion deal with SICPA. The contract relates to the enforcement of excise duty on goods via the  Excisable Goods Management System (EGMS).

The report said that had the deal proceeded on August 1, then KRA “would be spending more than Sh4 to collect Sh1.”

Puzzle of Swiss firm’s Sh81b deal for KRA duty stamps https://t.co/Qhnmv3JQmc

— The Standard Digital (@StandardKenya) July 29, 2018

Parliament last week refused to approve plans by KRA to roll out excise stamps on cosmetics, bottled water and other non-alcoholic drinks that would have raised in excess of Ksh3.6 billion for the taxman. This followed a successful petition to the National Assembly by Cherangany Member of Parliament Joshua Kutuny.

In May of this year, KRA won big at the Court of Appeal in a case against the implementation of EGMS. Mr. Kutuny however petitioned Parliament on the basis that a delay would allow a further appeal to the Supreme Court to be heard while also affording the National Assembly’s Public Investment Committee (PIC) to carry out a forensic audit of the KRA-SICPA deal.

The contentious EGMS deal revolves around a clause that allows SICPA to charge Ksh1.50 for every item on which it attaches excise duty stamp. The Swiss firm however refuted the totality of this claim by saying, “We wish to clarify that excise stamps prices as set by KRA for soft drinks, juices and cosmetics are only Sh0.60 per stamp while that of bottled water is just Sh0.50 and not Sh1.50 as claimed.”

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KRA has also said that the issue was done above board. “The major issue that has been raised about EGMS implementation has been the cost of the stamp for low priced products. This matter has been addressed through a review of the stamp pricing structure through Legal Notice number 53 of 2017 published on 30th March, 2017 and approved by Parliament in accordance with the Statutory Instruments Act.”