KRA: We have no ‘teeth’ to stop illegal sugar imports

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By WINSLEY MASESE

The taxman has admitted being unable to crack the whip over illegal importation of sugar into the country. This dampens hopes of achieving improved efficiency in the sector. Kenya has about 11 months to meet Comesa compliance that is due February 28th 2015.

In what appears to add more wounds into the limping sector, Kenya Revenue Authority (KRA) Commissioner General, John Njiraini, said the taxman has no control over Kenya’s porous border.

“Our staff can only man official border points. It’s not possible for us to control the entry of contraband goods along the borders such as those of Somalia and South Sudan,” he said. When the goods arrive at the point of entry, Njiraini said, it is not possible to verify that the containers have only the goods as specified in the import documents.

Authenticate permits

While appearing a parliamentary committee on Agriculture, Njiraini also said that they do not have the capacity to authenticate permits issued by the Kenya Sugar Board to importers to determine if they are given within the law. This means cheap imports will continue flooding the local market, even as stocks pile in millers’ stores.

With the cost of production for Kenyan sugar high, it cannot compete with these imports from neighbouring countries where the cost of production is cheaper.

Though the Government has tried to up efficiency in readiness for the Comesa safeguards, there are also indications that the country is unlikely to meet the set targets.

The statement by Njiraini angered the committee members with Mbita MP, Millie Odhiambo questioning the ability of the regulators to crack the whip.

 “Sugar imports into the country come in bulk, how come that KRA is unable to detect such huge amounts of smuggling into the country?” Millie was referring to a case in which a miller is said to have imported sugar, through a different company.

The development for example forced the committee to order cancellation of issuing of licences to companies that wish to import sugar. Committee chairman Nur Mohammed, the move is intended to tackle the flooding of cheap sugar imports in the country that have made the local product pile in miller’s stores.

Committee Chairman Adan Mohammed said that from May, KSB and KRA should not issue licences to any businessperson keen in importing sugar into the country.

Deliberate issues

“The step has been taken to ensure that the committee, the ministry and other stakeholders meet to deliberate issues that touch on the sector,” Nur noted. The step, according to the committee was taken in light of the non-payment for sugar delivered by farmers to the country’s millers. Awendo MP, George Opiyo complained that despite farmers from his constituency delivering cane to the local miller, they are yet to receive their dues since October. Mohammed wondered why Government allowed importation of sugar while millers had enough stock to meet the local demand.

Angry MPs demanded that names of importers forwarded to parliament for appropriate action to be taken. “We want names of those involved be forwarded and blacklisted for sabotaging a key economic sector in this country,” said committee member Ferdinand Wanyonyi.