Members of Parliament have summoned Kenya Revenue Authority (KRA) Commissioner-General Humphrey Wattanga to appear before them to defend claims that the authority lost over Sh62 billion in a tax evasion scandal by two palm oil importers.

The tax collector is said to have cleared Louis Dreyfus Company (LDC), Asia PTA Limited and Louis Dreyfus Company Kenya (LDC) of allegations that the authority cleared them of tax evasion.

Wattanga has been told to appear before the Finance and National Planning Committee of the National Assembly to explain why the authority cleared the firms even after it was clear that they mis-declared refined palm oil imported from Malaysia as crude when it arrived in the port of Mombasa.

The Kimani Kuria-led committee has raised seven issues that it wants clarified by the two firms which are owned by investors from the Netherlands.

Revenue mobilisation

“From the foregoing and the importance of revenue mobilization in the country, the committee resolved to invite you for a meeting to shed light on the matter,” reads the letter by Senior Deputy Clerk Jeremiah Ndombi.

The firms, according to information in the committee’s possession, indicates that palm oil imported by LDC companies is blended to up to 60 percent crude palm oil with refined palm oil of 40 percent, but the firms end up declaring it as wholly crude palm oil.

It has also been established that the firms import in refined form but declare the product as crude palm oil at the port of Mombasa so as to evade the 35 percent import duty.

It also attracts Import Declaration Fee (IDF) at the rate of 2.5 percent, Railway Development Levy of 1.5 percent and Value Added Tax (VAT) 16 percent.

Wattanga will be expected to explain to the committee the total cargo volume of palm oil imported by LDC Asia PTA through the port of Mombasa from February 23, 2023 and June 26. “The details should include the volumes of RBD Palm Stearin, Crude Palm Kernel Oil, Crude Palm Olein, Crude Palm Oil, and Crude Palm Fatty Acid Distillate,” reads the letter.

Total taxes

The Committee also wants Wattanga to provide details regarding the total taxes and fees paid by LDC Asia PTA in the importation of the palm oil cargo from February 23, 2023 and June 26, 2024.

Copies of all import declaration documents which are not limited to port health reports, Kenya Bureau of Standards (KeBS) reports, bills of ladings and cargo manifests for all the 120 cargo of palm oil imported by the company from February 23, 2023 and June 26, 2024 are also required.

The tax collector will also be expected to provide a list of consignees of all the palm oil cargo volumes imported by the company during the period.

“You should also avail information on cargo volume of RBD Palm Stearin, Crude Palm Kernel Oil, Crude Palm Olein, Crude Palm Oil, and Crude Palm Fatty Acid Distillate imported by LDC- Kenya limited, Acee Limited, Mazeras Oil Limited and Vipingo Industries Limited through the port of Mombasa from February 23, 2023 and June 26, 2024,” Ndombi writes.

MPs want the Commission general to provide details of the taxes and fees paid by LDC- Kenya limited, Acee limited, Mazeras Oil limited and Vipingo Industries limited in the importation of the palm oil products between February 23, 2023 and June 26.

The copies of all import declaration documents for palm oil cargo by LDC- Kenya limited, Acee limited, Mazeras Oil limited and Vipingo Industries limited through the port of Mombasa from February 23, 2023 and June 26, 2024 are required.