Nairobi — The Ministry of Finance has been accused of refusing to grant a Sh24 million tax waiver to the Moi Teaching and Referral Hospital in Eldoret for donated drugs worth Sh240 million.

The drugs, which are lying at the Jomo Kenyatta International Airport in Nairobi, were donated to the hospital by a hospital in the United States.

The ministry is insisting that a 10 per cent tax must be paid before the hospital can be allowed to remove the drugs from the airport.

The hospital director, Prof Haroun Mengech, told members of the Parliamentary Select Committee on Health touring the institution that his applications for a tax-waiver had been flatly rejected.

He argued it was unfair for the ministry to tax the drugs, which had been donated by wellwishers.

The ministry's rejection is likely to add more controversy to the minister, Mr David Mwiraria, who has waived taxes in two other cases.

Three months ago, Mwiraria granted Co-operatives minister Peter Ndwiga a Stamp Duty waiver in the purchase of a farm. He defended his action, saying the law gave him powers to grant the waiver.

Ndwiga had told the minister that the farm's produce would earn foreign exchange and create jobs.

And at the weekend, a tax waiver Mwiraria granted a Mombasa businessman to import foodstuff also raised a furore.

Mwiraria said the waiver to Rishad Amana of the Muslim Youth Organisation was lawfully granted, adding that it was not any different to those granted to USAid, World Food Programme, churches and other relief agencies.

Amana was granted a waiver to import food, ostensibly to distribute it to starving people in Coast province.

The Customs and Exercise Act explicitly forbids exemption from duty on rice, maize, wheat and milk, to protect Kenyan farmers from cheap imports.

Yesterday, Mengech said the drugs have been detained at the airport for the last three weeks.

The drugs, which will last the hospital for one year, need special storage and Mengech expressed fears over their poor handling at the airport.

"We have anaesthetic drugs in the consignment and if they are not well stored they're likely to get spoilt soon," he said.