Economy

Chicken seller declares less taxes in Sh1bn Kemsa deal

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Kenya Medical Supplies Authority offices, Industrial Area, Nairobi. FILE PHOTO | NMG

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Summary

  • A chicken and land seller under-declared tax on supply of Covid-related commodities to the Kenya Medical Supplies Authority (Kemsa) worth Sh1 billion.
  • James Chelule, the proprietor of Shop N Buy, which was registered a month to the first case of Covid-19, was hard-pressed to explain why he only declared imported goods worth Sh10.7 million and paid a paltry Sh687,562 to the taxman.
  • Shop N Buy was registered on February 14, 2020.

A chicken and land seller under-declared tax on supply of Covid-related commodities to the Kenya Medical Supplies Authority (Kemsa) worth Sh1 billion.

James Chelule, the proprietor of Shop N Buy, which was registered a month to the first case of Covid-19, was hard-pressed to explain why he only declared imported goods worth Sh10.7 million and paid a paltry Sh687,562 to the taxman. Shop N Buy was registered on February 14, 2020.

Mr Chelule who also owns land buying company Elite Ventures Limited and Kuku Chick, a chicken breeding firm said he imported 60 percent of the Sh1.03 billion Covid-19 related items that he sold to Kemsa during the height of the pandemic.

The National Assembly’s Public Investments Committee chaired by Mvita MP Abdulswamad Nassir wondered why Mr Chelule did not pay tax on Sh600 million being 60 per cent of the total sales of Sh1.03 billion to Kemsa.

“Ideally, you should have declared imports of Sh600 million or 60 percent of goods you said were imported. Records by Kenya Revenue Authority (KRA) Commissioner General Githii Mburu show that you declared goods worth Sh10.7 million and paid Sh687,562. Why did you under declare taxes?” Mr Nassir asked.

KRA RECORDS

He cited KRA records that showed a company which imported Covid-19 items worth Sh30 million paid taxes amounting to Sh1 million.

Mr Mburu last week tabled a document indicating that about three quarters or 77 companies that supplied Covid-19 related items to Kemsa failed to declare sales and pay taxes as required under law.

Out of 102 firms that did business with Kemsa, 43 companies made importations for Covid-19 related materials as per the World Health Organisation list of Covid-19 supplies worth Sh1.9 billion and paid Sh324 million as total taxes.