Members of Parliament have launched investigations into tax waivers amounting to Sh1.4 billion issued by the Kenya Ports Authority (KPA) in the last financial year, amid concerns that the waivers could be a conduit for corruption.
The Senate Committee on Roads, Transportation, and Housing has requested clarity on the waivers, suspecting they may disproportionately benefit certain individuals.
The authority's Managing Director William Ruto informed the senators that the waivers, mostly applied to accumulated storage fees, are guided by the authority's policy directive.
"In terms of waivers, we have a policy that guides us in granting waivers, which typically arise from storage charges. The parameters include donations and humanitarian efforts, where we offer a 100 percent waiver, and for government bodies, we provide guidance. There are also waivers for cases with court issues," Ruto explained.
Documents presented to the committee, chaired by Kiambu Senator Karungo Thang'wa, revealed details on the questionable waivers during the last financial year.
A significant portion of the waivers--over 50 percent--were granted to companies from Uganda, with reasons cited including delays in shipping documents and health-related issues.
"We are concerned whether these waivers go through the dispute resolution committee, as this is one area where KPA has previously faced corruption accusations. Most of the waivers are going to Uganda, and we need to understand why," Thang'wa remarked.
One notable case involved Uganda Police, which had accumulated Sh70 million in storage fees but received an 80 percent waiver, reducing the amount to Sh56 million.
Geddo Limited Uganda also benefitted from a 70 percent waiver, paying Sh3.2 million instead of the Sh7.6 million owed.
Joel Yawe of Uganda was granted a 50 percent waiver due to claims that he was unable to clear his cargo from the port due to illness. Instead of paying the full Sh4.2 million, he was directed to pay half the amount.
"Looking at this list, Uganda is really benefitting from these waivers. For instance, Semanda Aaron from Uganda was granted a waiver after experiencing difficulties clearing charges at the port due to his son's involvement in a serious accident. We need to verify if the son actually exists," Thang'wa said.
The committee chair also raised concerns that some agents in government may misuse the waiver system for personal gain since the E-citizen platform of channeling all government services charges had sealed loopholes for graft.
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"We need clarity on this because there are claims that, with E-citizen tightening controls, some agents are using the waiver system to pocket large sums. For example, a Sh50 million waiver might see an agent pocket Sh20 million," Thang'wa said.
KPA's Managing Director refuted the claims, asserting that the port authority operates under strict policy guidelines.
He emphasized that only 20 percent of imported goods attract storage charges, which are then waived on a case-by-case basis.
"We are guided by a waiver policy, and it's important to note that the Port of Mombasa competes with other ports. The waivers are related to storage charges, not mandatory fees," Ruto clarified.
He added, "Any port that incurs storage fees indicates a level of inefficiency. Goods are imported for use, not to be stored at the port. A port is not a storage facility."
