KRA probes Amaco’s Sh2 billion in unpaid duty

by Alex Ndegwa

An insurance firm linked to a minister is still under investigation by Kenya Revenue Authority over alleged unpaid duty worth Sh2 billion.

Amaco Ltd has been under suspension from transacting in customs bond since 2007, the Public Accounts Committee (PAC) heard on Wednesday.

The firm acted as guarantor for transit goods, of which the State auditor, Kenya National Audit Office, says there is no evidence to confirm the cargo left the country.

Khalwale: Raised query

Consequently, Amaco had outstanding general security bonds on various transit goods worth Sh1.5 billion in 2006/07 financial year.

After KRA sent demand notices, only Sh428 million was accounted for. The outstanding security bonds are reported to have risen to Sh3.4 billion in 2007/08 financial year.

"Amaco Ltd that were guarantors have been suspended from transacting in customs bonds for customs purposes," said Treasury Financial Secretary Mutua Kilaka.

Asked by PAC chairman Bonny Khalwale during the sitting at Parliament Buildings, who directors of Amaco were, he responded: "We will provide the names once we search."

Further action

Mr Hadi Abdullahi, an assistant KRA commissioner, said KRA was reconciling its accounts with Amaco before taking further action.

Pressed by MPs why the firm was suspended beforehand, Abdullahi said the action was necessary to ensure it did not accrue more debts.

Aasked by Konoin MP Julius Kones about the nature of goods, Abdullahi said they were "general goods" used in neighbouring countries.