The Kenya Revenue Authority (KRA) has rejected allegations of a tax revenue loss estimated at Sh64 billion due to the misdeclaration of crude palm oil cargo at the port of Mombasa. This follows an ongoing investigation into palm oil shipments that entered the country between March 2023 and June 2024, during which members of parliament indicated they had received intelligence suggesting cargo misdeclaration at the port.
The National Assembly Finance and Planning Committee is focusing on three companies: M/S Acee, M/S Mazeras Oil Limited, and Vipingo Industries Limited. The committee has requested KRA to provide details about the total volume of palm oil imports handled by LDC Asia PTA at the Port of Mombasa from February 23, 2023, to June 2024. This includes volumes of RBD Palm Stearin, Crude Palm Kernel Oil, Crude Palm Olein, Crude Palm Oil, and Crude Palm Fatty Acid Distillate, as well as the total taxes and fees paid by the company during this timeframe.
During the inquiry, committee chair Kuria Kimani, the MP for Molo, questioned why KRA cleared imports declared as crude palm oil when they were actually refined products. In response, KRA’s Deputy Commissioner for Investigations and Enforcement, Levi Mukhweso, defended the authority, stating that tests conducted on the shipments confirmed compliance 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. Based on its assessments, KRA has collected all relevant taxes required, considering factors such as product description, tariff classification, product quantity, product value, and country of origin,” Mukhweso stated during his testimony to the committee. He assured the committee that KRA had complied with legal requirements in collecting the necessary revenue and committed to providing any additional relevant information needed regarding the matter.
KRA Commissioner General Humphrey Wattanga also reiterated that no tax revenue was lost, as Louis Dreyfus Company (K) Ltd did not import any products directly into the market. He clarified that taxes on the products it imported were declared by the local and regional companies that purchased the products.
“M/S Louis Dreyfus Company (K) Ltd does not import any products directly into the market but sells to local and regional companies for declaration into home use and/or transit.,” he said.
He further indicated that a total of 546,588.86 Metric Tonnes (MT) of Crude Palm Oil (CPO), Crude Palm Olein (CPOL), Crude Palm Oil Kernel (CPOK), RBD Palm Stearin (RBDPS) and Palm Fatty Acid Distillate (PFAD) was exported into and through Kenya by Louis Dreyfus Company Asia PTA between 23rd February 2023 and 26th June 2024.
Baringo North MP Joseph Makilap sought to know what prompted the authority to undertake tests on some of the consignments that are under probe.
“Did you have a load declaration on the cargo that was landing at the port? And what warranted the suspicion that made you go ahead and conduct tests on this specific consignment?” asked Makilap.
He added that the load survey full report showed that the goods declared were refined palm oil. KRA however maintained that tests done by KEBS and its internal testing laboratory showed that the shipment was crude palm oil.
Between February 2023 and June 2024, six local companies imported a total of 315,138.38 metric tons of products from M/S Louis Dreyfus Company Asia PTA Limited. Of this total, four companies—M/S Louis Dreyfus Company Kenya Limited, M/S Acee Limited, M/S Mazeras Oil Limited, and Vipingo Industries Limited—accounted for 240,044.74 metric tonnes of imports.
Acee Limited imported 9,255.34 metric tonnes, paying Sh263.77 million in taxes, Mazeras Oil Limited brought in 15,270.58 metric tonnes, contributing Sh557.77 million in taxes and Vipingo Oil Industries Ltd imported the largest volume, 137,724.29 metric tonnes, and paid Sh3.73 billion in taxes.
