Feb 18th 2021- Kenya Revenue Authority is now on high alert on 77 out of 120 companies that supplied Covid-19 related items to KeMSA after they failed to declare sales and pay taxes as required under the law.
KRA Commissioner General Githii Mburu told Parliament that investigations had been launched to establish why the firms failed to disclose and pay domestic taxes claiming to have lost billions of shillings in unpaid taxes
Among the 77 companies, is Kilig Limited Company and Azure Company that signed a Kshs 4 billion and Kshs 347 million deal respectively to supply PPE’s to KeMSA.
Mburu appeared before National Assembly’s Public Investments Committee (PIC) to provide information on a special audit report on utilization of the Covid-19 procurement billions that allegedly were being assigned inattentively.
He disclosed that 43 companies made importations for Covid-19 related materials as per the World Health Organisation list of Covid-19 supplies worth Kshs 1.9 billion and paid Kshs 324 million as total taxes.
He could not disclose the amount of tax the companies may have evaded since the firms have not filed self-assessment, meaning taxpayers may have lost billions of shillings in unpaid tax.
Kemsa entered into contracts with 102 local firms to supply Covid-19 related items valued Kshs 7.8 billion. The authority has since paid out Sh4 billion to suppliers of personal protective equipment (PPE).
“Seventy seven companies did not declare any supplies to Kemsa. KRA is currently conducting reviews on the companies to establish compliance status,” Mburu told MPs. “We have deployed comprehensive audits, compliance checks and tax intelligence reviews to ensure integrity and fairness is infused into how companies handled their tax administration matters,” he added.
Eight declared supplies to KeMSA under the exempt supplies (not subject to tax) worth Kshs 749,000.